These agents act in their own name but on behalf of a principal in matters of sale or purchase. They receive commission and are entitled to request reimbursement of all necessary costs incurred. They must act in the interests of their principal with loyalty, and comply strictly with any instructions contained in their contract.
They may retain any goods held on behalf of their principal until receipt of full payment of their commission and costs.
Any loans or advances granted by the factor to a third party in the absence of the principal’s consent are made at the factor’s own risk.
When the factor sends goods or acts as a carrying agent, he guarantees against late delivery, damage and losses, unless these have been caused by a third party or force majeure.
If a factor acts in bad faith vis-à-vis his principal, and in particular if he informs him that he has paid a higher purchase price or obtained a lower sale price than in actual fact, he loses all rights to payment of his commission.
Del credere agents
A factor who guarantees the payment or other obligations of those with whom he deals is known as a del credere agent. He is entitled to additional commission referred to as ducroire.
Customs agents
Certain factors are registered with the customs authorities as customs agents. These factors are responsible for paying all duties, taxes or fines to the customs authorities on behalf of their principals.
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