What are the people? Postings, report and contract between the commission agent and the principal

According to the financial dictionary, the committent is a party to the commission agreement, which instructs the other party (the commission agent) to make a transaction with the goods for a cash consideration (commission). The deal can also be made with bills of exchange, foreign currency, bonds, etc. In addition, it is made on behalf of the commission agent, but in the interests and at the expense of the committent. The goods are received by him at a special off-balance account and are not property at the same time.

Commission is a contract

When concluding an agreement, the reseller sells and buys material values in his own name, but he must act strictly within the limits of his powers. Otherwise, the document may be terminated, and the commission agent will be charged damages. If a third party participates in the transaction, then all this must be stipulated in the agreement. Such trade can be of a one-off nature. Within a certain period, several transactions can be made for imports, exports, certain banking transactions or hiring. In general, committent persons are such persons who only charge to sell any goods.

How to avoid trouble during the transaction?

That there were no misunderstandings, it is necessary to stipulate everything in the contract. In addition, the committent must reimburse all costs associated with the execution of a particular assignment. The signing of such contracts is widely used in international trade, but in this case it is one-off. An important part of such an agreement is the statement of the powers of the parties on technical and commercial conditions. The creditors must state this in the agreement, indicate all that is necessary, and write that the transaction will be made only once. If everything is done correctly and legally competently decorated, then each side will fulfill its obligations, as a result of which such a business will bring considerable profit. Otherwise, it will be difficult to maintain documents and take into account revenues, which can affect their size, and the transaction will only bring losses.

What is fixed in the contract?

This document should contain information about the minimum selling prices for the export of goods and the maximum if imports are made. Also, the minimum terms for deliveries of consignments must be stipulated in the contract by the comitents. This is necessary so that later there will be no misunderstandings. The document still requires technical and qualitative data, marginal amounts for the liability of all parties, as well as the amount and procedure for payment of remuneration and commission money. You should also know that the commission agent and the committent fix their duties and the main terms of the contract, for example, the quantity of the goods, the prices, the terms of delivery, the terms of the loans, if they are provided, etc.

Obligations of the intermediary

Partners from the opposite side and sellers are all commission agents. These persons are responsible and must timely submit a report to the principal. They are responsible for the safety of the goods, i.e., it must be in proper form throughout the entire period of the contract. Intermediaries can fulfill additional obligations in the form of providing services for studying the market, advertising, maintenance or to protect commercial interests. The contract should contain information on the remuneration, which should cover all expenses incurred by the commission agents. Its amount can be increased for accepting additional guarantees. For example, if the buyer is a third party and the guarantor is a seller, then the intermediary assumes responsibility for the solvency of the buyers. In this case, the commission agent must independently compensate for all monetary expenses if the third party becomes insolvent.

Conclusion of contracts with organizations

Foreign trade companies that act as guarantors must include the responsibility of the seller in the document. In particular, this refers to the timeliness and completeness of all payments. In any trading business, all documents must be in order, so that in the case of inspections or some dispute, you can sort out and calculate sales and cash. It should be borne in mind that only one commission is posted at the committent, and others are in the papers of the intermediary. They depend on what the duties of the intermediary under the commission agreement consisted of. If the guarantor is an organization, then it can manufacture goods, and the company must finance transportation to the delivery point. If it resells the products of another manufacturer, then the commissioner independently finances foreign trade operations, namely, pays the manufacturer the cost of the goods.

Commission agreement - registration of all types of relations

Such an agreement is bilateral, therefore, each party has its own rights and obligations. Administrative, financial and personal relations are taken into account between the guarantor and the intermediary in the process of working out the conditions for mutual settlements. If a company acts as a commission agent, in which the principal has invested money, then financial and other relations are maintained on a trust basis. It is also possible that the intermediary sells products at underpriced prices, then he needs to reimburse the difference to the surety, if he does not prove that it was not possible to sell the property at a specified cost, and the sale at a discounted price warned losses. It is worth noting that the agreement with the principal is also used in the sale of shares. In general, such an agreement should be concluded with the guarantee of sales to another person.