TYPES OF AGENCY
An agent could belong to one of the following classification:
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- Universal Agent – An agent has given unlimited or unrestricted power to enter into any type of business contract on behalf of the principal.
- General Agent – An agent that has authority to act in all matters relating to a particular business.
- A Commissioned Agent – Buy and sell goods at competitive prices on behalf of the principal in return for a commission linked to sales figures posted. He can deduct his commission when remitting sales money to his principal and equally add his commission to the cost of goods bought on behalf of the principal.
- Broker – A commercial agent who has the following features:
- Does not have possession of goods
- A commission agent
- He does not sell in his own name
- His main job is to link his principal with potential customers
- He cannot pledge the goods
- He has no lien on the goods
- He commission is termed
- brokerage commission
- He can only sue in the principal’s name for the recovery of any amount due to him.
- The broker tends to specialize in a particular commodity e.g. brokers at the Stock Exchange.
- Jobbers – Agents who buys from the principal and sell on his own name and behalf. He has possession of the goods. He usually buys at one price and sells at a higher price in order to make profit for himself. This profit if called the jobber’s turns e.g. jobbers dealing in shares at the Stock Exchange.
- Factors – (Mercantile Agent) sell goods on behalf of his principal on commission basis. He has possession of the goods. He can sell and also issue receipts in his own name. He can fix and sell at prices he thinks best for the principal and may also give credit to a reasonable extent in his name. A factor can insure the goods in his possession because he has insurable interest (i.e. he will suffer financial loss if the goods are damaged or destroyed). Factors can pledge the goods i.e. they can give guarantee on the goods. They can also sue on the contract made by them and they have a lien (a legal claim on their principal’s goods for any outstanding claims). Factors receive commission called factorage for their services.
Auctioneers – An agent licensed to sell goods on auction to members of the public according to laid down instructions at public places. The auctioneer advertises and sells the goods based on two clauses which are:
(a) Without Reserve – Where he sells the goods to the highest bidder during the auction irrespective of what the cost price is.
(b) Subject to Reserve – The auctioneer cannot sell below the cost price or reserve price of the commodity no matter what the highest bid may be
FEATURES OF AN AUCTIONEER
(i) A licensed agent
(ii) Sells goods on auctions to members of the public places.
(iii) He advertises the goods
(iv) He is a commission agent
(v) He may not be in possession of the goods
(vi) The auctioneer can act for the seller as well as the buyer
(vii) He has implied authority to sell without a reserve price.
- Forwarding and Clearing Agent: This is an agent who specializes in the delivery and receipt of goods at the docks or airports on behalf of the principal. His duties arise mainly because of the technical and complicated procedure involved in clearing goods at the seaports and airports. As a specialist on the job he completes all the formalities and customs procedures in clearing the goods at the port. He takes possession of the goods and arrange for their delivery to the location specified by the principal. He is very prominent in international trade.
- Del credere Agent – This is a commission agent who sell goods on behalf of his principal. He takes possession of the goods and sells in his own name. He accepts the responsibility for the collection of proceeds of sales made by him on credit. He guarantees full payment for any sales made and is therefore liable to pay his principal for the goods he sold if the buyer defaults in payment i.e. he bears any bad debt that may arise. As a result of his bearing this risk, he receives an additional commission known as del credere commission.
- Manufacturer Representation: This is an agent that represents a local or foreign manufacturer in the distribution and sale of its products in a particular area or country. This agent serves as an appendage of the manufacturer in the area he is residing.