Page 124 - DMGT102_MERCANTILE_LAWS_I

Mercantile Laws-I

Notes 9.3.2 Mercantile or Commercial Agents

A mercantile or commercial agent may assume any of the following forms: broker, factor,
commission agent, del credere agent, auctioneer, banker, Pakka and Katcha Adatias and indentor.
A broker is a mercantile agent engaged to buy and/or sell property or to make bargains and
contracts between the engager and third party for a commission (called brokerage). A broker has
no possession of goods or property. He is merely a connecting link between the engager and a
third party. The usual method of dealing by a broker is to make entries of the terms of contract
in a book, called the memorandum book and to sign them. He then sends the particulars of the
same to both parties. The document sent to the seller is called the sold note and the one sent buyer
is called the bought note. A factor is a mercantile agent who is entrusted with the possession of
goods with an authority to sell the same. He can even sell the goods on credit and in his own
name. He is also authorised to raise money on their security. A factor has a general lien on the
goods in his possession. A factor, however, cannot barter the goods, unless expressly authorised
to do. Also, he cannot delegate his authority.
A commission agent is agent who is employed to buy or sell goods or transact business. The
remuneration that he gets for the purpose is called the commission. A commission agent is not
liable in case the third party fails to carry out the agreed obligation. A commission agent may
have possession of the goods or not. His lien in case of goods in his possession is a particular lien.
A del credere agent is one who, in consideration of an extra remuneration, called a del credere
commission, guarantees the performance of the contract by the other party. A del credere agent
thus occupies the position of a guarantor, as well as of agent. He is normally appointed in case of
deals with foreign nationals, about whom the principal may know nothing.
An auctioneer is agent appointed to sell goods by auction. He can deliver the goods only on
receipt of the price. An auctioneer can recover the price from the highest bidder (i.e., the buyer)
by fi ling a suit in his own name. In any case, an auctioneer can sell only by public auction and
not by a private contract. His position differs from a factor inasmuch as the auctioneer has a
particular lien, whereas the factor has a general lien.
Though the relationship between banker and customer is ordinarily that of debtor and creditor,
he acts as his agent when he buys or sells securities on his behalf. Similarly, when he collects
cheques, bills, interest, dividends, etc., or when he pays insurance premium out of customer’s
account, as per customer’s mandate, he acts as his agent.
A Pakka adatia is a person who guarantees the performance of the contract, not only to his
principal but also to the broker (shroff) on the other side. A peculiarity of pakka adatia is that
he can himself perform the contract instead of offering it to the third party. A Katcha Adatia, on
the other hand, does not guarantee the performance of the contract. However, he guarantees the
performance on the part of the principal. Thus, he will be responsible to the other broker or shroff
who contracts on behalf of the other party, in case of non-performance by his principal.
An indentor is a commission agent, who for a commission, procures a sale or a purchase on
behalf of his principal, with a merchant in a foreign country. Such agent gets commission at the
rates mentioned in the indent.

9.3.3 Non-mercantile or Non-commercial Agents

Some of the agents in this category are: wife, estate agent, counsels (advocates), attorneys. The
following principles provide guidelines as regards wife as agent of her husband:
1. If the wife and husband are living together and the wife is looking for necessaries, she is
agent. But this presumption may be rebutted and the husband may escape liability if he can
prove that
(a) he had expressly forbidden his wife from purchasing anything on credit or from
borrowing money,

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