Commercial agents are individuals or entities that carry out the business of one or more principals in an independent manner. Usually, they are self-employed intermediaries authorized to negotiate the sale and purchase of goods on behalf of another person, and/or to negotiate and conclude such operations on behalf of and in the name of the principal.
Commercial agents may or may not have the authority to represent and act on behalf of the principal. Most agents do not have the implied authority to represent the principal. In addition, commercial agents may or may not be exclusive, depending on the terms of the agreement.
Commercial agents shall promote or conclude businesses in the interest of the principal. Therefore, they undertake instrumental activities to motivate third parties to enter into such agreements with his principal.
There are some other kinds of “agents” which activities or obligations are similar to those of the commercial agents, such as sales agents, proxy, distributors and employees.
Sales agent are professionals whose role within a company is to sell the product or service that they provide. The sales agents are entitled to a commission for the sales of the principal’s goods or services, generated by the sales agent from all sales made in the sales agent’s territory. Typically, the services of a sales agent are limited to a certain territory.
The proxy or representative as a general rule commits to enter into agreements on behalf of its principal. Thereby, rights and obligations deriving from the acts concluded by the proxy oblige its principal.
While the commercial agent does not take ownership of goods, distributors purchase goods and resell them to local retailers or consumers. Generally speaking, agents are paid through a commission scheme based on the sales value generated, while distributors add a margin on top of the products’ prices.
The subordination and economic dependence of the employee with respect to its employer do not exist in the agency agreement. This difference is essential to avoid the agent from claiming the principal the protective status of an employee.