(a) What is an agency?
(b) Explain the features of the following agents:
(i) Factor
(ii) Broker
(iii) Del-credere agent
(iv) Auctioneer.
Explanation
(a) Agency is a legal relationship that exists between two persons when one, called the agent, is employed by the other, called the principal, to bring the principal into legal relations with the third parties.
(b) Factor:
(i) He can sell goods in his own name.
(ii) He has a general lien on the goods in his possession.
(iii) He can give the usual business warranties.
(iv) He acts on behalf of a principal.
(v) He can sue the principal for Commission.
Broker: A broker is an agent whose principal role is to make bargains and contracts on behalf of the principal with a third party.
(i) He cannot pledge the goods.
(ii) He has no possession of goods/ no lien on goods.
(iii) He receives Commission called brokerage.
(iv) He cannot sell in his own name.
(v) He can only sue in principal's name for the recovery of any amount due to him.
Del- Credere Agent:
(i) He sells goods on behalf of the principal.
(ii) He is liable to pay the principal if the buyer refuses to pay.
(iii) He receives extra commission called Del -credere commission.
(iv) He takes possession of goods.
(v) He sells in his own name.
Auctioneer:
(i) This agent is licensed to sell goods on auction to members of the public at public places to the highest bidder.
(ii) He may not be in possession of the goods
(iii) The Auctioneer can act for the seller as well as the buyer.
(iv) He has an implied authority to sell without a reserve price.