Agreement Between a Firm and Broker
Agreement Between a Firm and Broker: A type or contract, whereby a person or company acts as a sales agent on behalf of the exporting company (principal), introducing its products to potential buyers in the external market, in exchange for a commission based on the value of the business deals arranged and paid to the principal. As with the distributor, this relationship does not imply a formal interdependence between the principal and the agent intermediary, unless the laws of the country of destination state otherwise.
The mechanism of commission agent or intermediary is therefore very useful to companies that are launching their export operations. This type of contract is ideal for small companies with little or no experience in international trade, as it allows them to access international markets without having to make large investments. Everything is left in the hands of the agent. This type of contract is usually called Commission Sales Agreement.(Agreement Between a Firm and Broker)
Agreement Between a Firm and Broker: An agency agreement is a legal contract creating a fiduciary relationship whereby the first party (“the principal”) agrees that the actions of a second party (“the agent”) binds the principal to later agreements made by the agent as if the principal had himself personally made the later agreements. The power of the agent to bind the principal is usually legally referred to as authority. Agency created via an agreement may be a form of implied authority, such as when a person gives their credit card to a close relative, the cardholder may be required to pay for purchases made by the relative with their credit card.
Many states employ the equal dignity rule whereby the agency agreement must be in writing if the later agreement would also necessarily be written, such as a contract to buy thousands of dollars’ worth of goods.
An example of the existence of an agency agreement at issue in a 2006 court case arose when a tennis tournament sponsor sued Venus and Serena Williams for not participating. The sponsor argued that their father, Richard Williams, had committed to their participation in the tournament. The Williams sisters argued that their father did not have the authority to bind them to such an agreement. If their father did commit the sisters to play, the issue for the court to decide is whether a valid agency agreement existed between the Williams sisters and their father. If not, then they likely were not bound to his agreement under the law of agency.(Agreement Between a Firm and Broker)
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