Description

Agency by Commission is a type of agency where an agent agrees with a principal to carry out specific commercial activities or transactions in exchange for a commission based on the value of the transactions or the work done. This can cover various fields such as buying and selling goods and services, or providing advice and planning.

Details of Agency by Commission

1. Definition:
   • Agency by commission is a business relationship where the agent is appointed to represent the principal in completing deals or transactions, and the agent earns a commission for their services.
2. Types of Agency by Commission:
   • General Agency by Commission: The agent handles various commercial activities based on the principal’s instructions.
   • Special Agency by Commission: The agent’s role is limited to specific business activities or transactions.
3. Agent’s Obligations:
   • Carrying Out Transactions: The agent must execute transactions according to the terms agreed upon with the principal.
   • Disclosure of Information: The agent must inform the principal of all relevant information related to the transactions they handle.
   • Acting in Good Faith: The agent must act with honesty and in the best interest of the principal.
4. Principal’s Obligations:
   • Paying Commission: The principal is obligated to pay the agreed-upon commission to the agent based on the value of the completed transactions.
   • Providing Information: The principal must provide all necessary information and details to the agent to execute the transactions.
5. Agreement:
   • Agreement Terms: The terms of the agency by commission are usually outlined in a written agreement that specifies transaction details, rights and duties of both the agent and the principal, and the commission rate.
6. Laws and Regulations:
   • Legal Framework: Laws related to agency by commission vary by country, outlining the conditions and procedures for implementing the agency.
7. Commission:
   • Calculating Commission: The commission is calculated based on an agreed-upon percentage of the transaction value or a set fee.

Examples of Agency by Commission:

• Sales Mediation: An agent sells products or services and earns a commission on each sale.
• Commercial Promotion: An agent promotes products or services for the principal and receives a commission based on the sales volume or contracts secured.
• Financial Investments: A financial agent manages investments on behalf of the principal and earns a commission on profits or investment returns.

Agency by commission is a common business arrangement that allows the principal to expand their business through the expertise of agents without directly managing daily operations.