A mercantile agent is a person appointed by businesses to represent them and conduct dealings with other parties on their behalf. As an agent, they can buy and sell goods for their principal but do not conduct business for themselves. Their main roles are to act as an intermediary between the principal and third parties and help facilitate the transfer of goods without acquiring ownership. Mercantile agents are entitled to commission for their services and have certain rights like reimbursement of expenses and holding property as security. They can be general or special agents depending on the scope of their authority, and take on functions like selling goods as a factor or simply arranging orders as a commission agent.
2. MEANING
A mercantile agent is a person who is appointed by those in
business to act on their behalf or to represent them in dealing
with other persons. The person on whose behalf he acts as an
agent is known as the ‘Principal’.
3. CHARACTERISTICS
1. He can buy and sell the goods on the behalf of his principle or he/ she can consign
the agent for the purpose of sale
2. He represents his principle and doesn’t do business for himself
3. Act as a link between the principle and third party
4. He helps in the transfer of good without acquiring the ownership
5. He gets commission for the service rendered
4. Duties of an agent
A. Performance of duties
B. Maintenance of skill, care and diligence
C. Render proper accounts(true and proper statement of a/c)
D. Return money received
E. Delegation of authority(prior permission needed for the appointment of sub-agent)
5. RIGHTS OF AN AGENT
I. Entitled to receive remuneration upon the completion of the work
II. Should meet all expenditure and reimbursed by the principal.
III. Can hold agency or property
IV. Right of lien on goods for payment of his remuneration
V. Losses should get indemnified by the principal
VI. Can detain the good in transit
6. KINDS OF MERCANTILE AGENTS
A. On the basis of rights, and
B. On the basis of functions
ON THE BASIS OF RIGHTS
A. General mercantile agents(full authority)
B. Special or particular mercantile agent (just do a particular job )
ON THE BASIS OF FUNCTIONS
A. Factor(sell on his own name on the commission)
POWERS
1. Sell goods on credit and time he thinks best
2. Payments for the goods
3. Maintain a lien on goods for charges due to him
7. B. Commission agent (doesn’t bear risk )
DUTIES
a. buy at reasonable rate and sell at maximum profit
b. get order from buyer and sell goods in his name
c. arrange for packing, transport and delivery of goods
d. extend credit and collect payments
e. can claim commission and expenses
C. Del Credere agent(payment for the good he sell and risk he bears)
D. Broker
E. Auctioneers(sells by auction)
F. Underwriters(they shall subscribe ,if others don’t)
G. Forwarding agents(international trade )
H. Clearing agents(importing goods from abroad)
J. Warehouser (storage in his godown)
8. CONCLUSION
In modern times with the growth of the business organization, the contracting
agency plays an important role in the devolution of authority by the principal to
the agent. Chapter X of the Indian Contract Act illustrates in detail the various
intricacies of the contract of agency, the rights, duties and liabilities of the third
party, the principal and the agent. It also explains that the use of the agency is
not essential, it could also be inferred from the implied conduct of the parties.
Further, this contract also provides an account of the diverse ways for revocation
of the contract of agency by the principal and the agent
