Commercial Agency Law

Commercial agency has always been a popular form of business. To operate effectively in this form, traders need to understand the regulations on commercial agents below. Our following article will analyze related issues to help readers better understand this issue.

About the concept

Pursuant to Article 166 of the Commercial Law 2005 stipulates that commercial agency is a commercial activity, whereby the principal and the agent agree that the agent will buy and sell goods on their own behalf to the principal. agent or provide services of the principal to the client for remuneration.

Form of contract

Commercial agency relationship is established by contract. An agency contract is entered into between a trader assigning an agent and a trader acting as an agent. An agency contract must be entered into in writing or in another form of equivalent legal validity.

Contents of agency activities

Contents include the conclusion and performance of an agency contract between the principal and the agent and the conclusion and performance of a contract for the sale of goods or provision of services between the agent and a third party upon request. of the agent. In goods sale and purchase agency, the principal is the owner of the goods or the money delivered to the agent. When performing agency activities, the agent is not the buyer of the agent’s goods, but only the consignee and then continues to sell to a third party. Only when the goods are sold does the ownership of the goods pass from the assignor to a third party.

When entering into an agency contract for the purchase and sale of goods, the parties should agree and write in the contract the following terms: Goods or agency services; Agent form; Agent remuneration; Duration of contract; Rights and obligations of the parties. In addition, the parties can agree and write in the contract other contents such as contract security, warranty regime for agency goods, obligation to pay expenses related to agency activities. management, technical support, facilities for agents to organize advertising and marketing, material reward and punishment regime, compensation for damage. The subject matter of a commercial agency contract is also a service contract, so the subject matter of an agency contract is the sale and purchase of goods or the provision of services by the agent to the principal.

Agent forms include

(i) Exclusive agency is a form of agency where in a certain geographical area the principal only assigns an agent to buy and sell one or several goods or provide one or several types of services. certain.

(ii) (ii) Outsourcing agency: Outsourcing agent is a form of agency in which the agent purchases and sells a whole volume of goods or provides a full service for the principal. . In this form of agency, the principal sets the delivery price for the agent, the agent decides the selling price of goods and provides services to the customer, so the remuneration the agent enjoys is the difference. The price difference between the actual purchase and sale prices and the purchase and sale prices shall be determined by the principal.

(iii) General agent buying and selling goods and providing services: This is a form of agency in which the agent organizes a system of affiliated agents to carry out the purchase and sale of goods and provide services to the other party. agent delivery. General agent represents the affiliated agent system. The affiliated agents operate under the management of the general agent and in the name of the general agent. Other forms of agents such as commission agents, payment guarantee agents, etc.

Agent remuneration

Form of commission: The principal sets the purchase price, the selling price of goods or the price of providing services to the customer; If the principal does not fix the purchase price, the selling price of goods or the price of service provision for the customer, but only assigns the delivery price to the agent, the agent is entitled to the price difference.

The parties can also agree on a specific form of remuneration, calculating the remuneration the agent is entitled to: Pursuant to Clause 4, Article 171 of the 2005 Commercial Law, the parties can agree on how to calculate the remuneration. In case the parties do not agree: The actual level of remuneration that the parties have been paid before, in case point a of this clause is not applicable, the agency remuneration level is the average remuneration applied to the same party. types of goods and services that the principal has already paid to other agents, in case points a and b of this clause cannot be applied, the agency remuneration level is the normal remuneration level applied to the same type of goods or services. goods and services in the market

Agent payment: Pursuant to Article 176 of the Commercial Law 2005; Unless otherwise agreed, the payment of goods, service provision and agent remuneration shall be made in installments after the agent completes the purchase or sale of a quantity of goods or supplies a quantity of goods. certain amount of service.

Term of agency: Pursuant to Clause 1, Article 177 of the Commercial Law 2005, unless otherwise agreed, the agency term shall only terminate after a reasonable time, but not earlier than 60 days, from the date of either party. the party notifies the other party in writing of the termination of the agency contract.

Note

Unless otherwise agreed, if the principal gives a notice of termination of the contract in accordance with the above provisions, the agent has the right to request the principal to compensate an amount of money for the time he has acted as an agent for the principal. that agent.
The value of the indemnification is one month of the average agent’s remuneration during the period of agency receipt for each year in which the agent acts as an agent for the principal.
In case the agency period is less than one year, the compensation is calculated as one month’s average agent remuneration during the period of agency receipt.

In short, regulations on commercial agents are not too complicated. Normally, the agency form is often used by large-scale enterprises with high efficiency.

The above article is the entire content of advice and comments in accordance with the current law on frequently asked questions of readers around the issue of commercial agents. This is one of the issues that many individual readers are interested in today, however, not everyone has the time to learn and understand the regulations on this issue. Hope the article is useful to you. All your questions will be answered as quickly as possible. Contact Bilaw today to receive support from us.