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The commercial agency contract related to your costs and benefits is an effective tool for the distribution of products and services. It can be seen as a safe way to make way for new markets in different territories without the complications that come with companies taking on this challenge at first.

This contract is but the contract in which two parties agree to the promotion or exploitation of business for a particular company in a given territory under a branch of commerce specified on an ongoing basis.

Two parties participate in this contract, the agent who is responsible for promoting and operating a company’s business.

The second participant of the contract would be the principal,who gives the agent the powers to be represented by this expert in the work, to expand his business.

Requirements of a commercial agency contract

This contract has certain requirements,mainly for it to be valid it must be in writing, the territory where the agent will develop the agency in case of territorial exclusivity must be established.

To carry out a commercial agency contract it is necessary that it has the following content:

  • Names, surnames, identification document and address of each participant (agent and principal).
  • Objective of the contract and the specific branch of activities to be developed.
  • The agent’s powers and limitations.
  • Duration of the contract
  • Territory in which the agent’s activities will take place.

This contract then has certain features that must be recognized before being applied, as they are:

  • The contract acts as an intermediary.
  • The work must be carried out permanently and in a stable manner.
  • The agent has an obligation to promote or exploit the business of the entrepreneur in a given territory.
  • It is the right of the manager to receive remuneration.

Parts of a commercial agency contract

Both parties will benefit from this contract in different ways, the scheduled or principal will enjoy the expansion of their business by the hand of an expert and the agent will be able with the acquired powers to exploit his business and receive financial compensation.

The agent

It is the entrepreneur who must be in charge at all times to promote the principal’s business in a specific geographical area, its main function should be to achieve the conclusion of contracts on behalf and account of the principal. This can work independently, however, it must do so under the conditions of the agency.

The agent can be referred to as a stable and independent entrepreneur, always acting on behalf of another entrepreneur.

The agency

The agency or principal is the entrepreneur who wants to expand their market and successfully conclude their business by intervening an expert in the field.

Agent’s obligations

The agent in its work must act in the interests of the agency, acting in good faith and being diligent at all times, however, the agent does not have the authority to enter into contracts on behalf of the principal or to compel him to do so, but he must only transmit to him the offers he receives.

You must introduce the goods to this new market and promote their sale in the territory specified in the contract and in the promotional channels adjusted to the conditions of the agency.

The agent is not authorized to receive payments from the agency if it is not contemplated in writing and authorized by the principal. In case you have authorization, this must transmit the payment to the principal as soon as possible by keeping the money in deposit and separately.

You must always keep the principal aware of its activities, the state in which the market is located and the competition, always being diligent, it is also of the utmost importance that it always clarify the laws and regulations in force to the agency on the territory where the activities that apply to its product are carried out.

Difference between sales agent and distributor

In essence they are the same, it sells or distributes the services or products of someone else, however, this does not mean that they have in their entirety the same functions, even though both benefit from the employer, one has a direct commercial relationship with him while both parties are under a contract, as is the case of the commercial agent. In the case of the distributor it is only the use of the price of the product between the purchase operation and its resale.

To be even more specific, the distributor does not intend or intend to exploit or promote the entrepreneur’s business, if not his own business, when he disseminates a product to resell it and seeks customers to whom to sell the product, does so to promote and exploit his own business, that is, resale. It should be noted that although the intention of the distributor is not to promote the business of the entrepreneur who provides the products, it benefits that they reach the hands of the consumer.

In addition to this the distributor must assume the risks of the operation such as unstable market prices, deterioration of the goods, insolvencies, among others.

Agent Independence

This independence is relative to the business organization that has the commercial agent and not in terms of the performance of the agency, because the agency who commissions the business needs to have the powers to ensure that the agent meets the requirements to prepare the business.

Termination of the contract

The commercial agency contract may culminate in the same reasons as a mandate contract and because of the expiration of the same contract.

The duration of the contract can be defined or indefinite, however, an initial term of 1 or 2 years is usually determined.

Each party may terminate the contract as long as it gives prior written notice to the other party.

Reasons for terminating the contract include:

  • Failure to comply with your obligations
  • Exceptional circumstances not under the control of the parties.
  • Failure to patch any non-compliance.

In conclusion a commercial agency contract can boost your business with someone else who is a specialist in the distribution of products, it is the most effective way to break paths to other markets without taking on all tasks.

At Casa Fresca we are kept informed about every step of the process, for us it is essential to manage the commercial agency contracts to ensure an optimal distribution of our fruits.

The commercial agency contract related to your costs and benefits is an effective tool for the distribution of products and services. It can be seen as a safe way to make way for new markets in different territories without the complications that come with companies taking on this challenge at first.

This contract is but the contract in which two parties agree to the promotion or exploitation of business for a particular company in a given territory under a branch of commerce specified on an ongoing basis.

Two parties participate in this contract, the agent who is responsible for promoting and operating a company’s business.

The second participant of the contract would be the principal,who gives the agent the powers to be represented by this expert in the work, to expand his business.

Requirements of a commercial agency contract

This contract has certain requirements,mainly for it to be valid it must be in writing, the territory where the agent will develop the agency in case of territorial exclusivity must be established.

To carry out a commercial agency contract it is necessary that it has the following content:

  • Names, surnames, identification document and address of each participant (agent and principal).
  • Objective of the contract and the specific branch of activities to be developed.
  • The agent’s powers and limitations.
  • Duration of the contract
  • Territory in which the agent’s activities will take place.

This contract then has certain features that must be recognized before being applied, as they are:

  • The contract acts as an intermediary.
  • The work must be carried out permanently and in a stable manner.
  • The agent has an obligation to promote or exploit the business of the entrepreneur in a given territory.
  • It is the right of the manager to receive remuneration.

Parts of a commercial agency contract

Both parties will benefit from this contract in different ways, the scheduled or principal will enjoy the expansion of their business by the hand of an expert and the agent will be able with the acquired powers to exploit his business and receive financial compensation.

The agent

It is the entrepreneur who must be in charge at all times to promote the principal’s business in a specific geographical area, its main function should be to achieve the conclusion of contracts on behalf and account of the principal. This can work independently, however, it must do so under the conditions of the agency.

The agent can be referred to as a stable and independent entrepreneur, always acting on behalf of another entrepreneur.

The agency

The agency or principal is the entrepreneur who wants to expand their market and successfully conclude their business by intervening an expert in the field.

Agent’s obligations

The agent in its work must act in the interests of the agency, acting in good faith and being diligent at all times, however, the agent does not have the authority to enter into contracts on behalf of the principal or to compel him to do so, but he must only transmit to him the offers he receives.

You must introduce the goods to this new market and promote their sale in the territory specified in the contract and in the promotional channels adjusted to the conditions of the agency.

The agent is not authorized to receive payments from the agency if it is not contemplated in writing and authorized by the principal. In case you have authorization, this must transmit the payment to the principal as soon as possible by keeping the money in deposit and separately.

You must always keep the principal aware of its activities, the state in which the market is located and the competition, always being diligent, it is also of the utmost importance that it always clarify the laws and regulations in force to the agency on the territory where the activities that apply to its product are carried out.

Difference between sales agent and distributor

In essence they are the same, it sells or distributes the services or products of someone else, however, this does not mean that they have in their entirety the same functions, even though both benefit from the employer, one has a direct commercial relationship with him while both parties are under a contract, as is the case of the commercial agent. In the case of the distributor it is only the use of the price of the product between the purchase operation and its resale.

To be even more specific, the distributor does not intend or intend to exploit or promote the entrepreneur’s business, if not his own business, when he disseminates a product to resell it and seeks customers to whom to sell the product, does so to promote and exploit his own business, that is, resale. It should be noted that although the intention of the distributor is not to promote the business of the entrepreneur who provides the products, it benefits that they reach the hands of the consumer.

In addition to this the distributor must assume the risks of the operation such as unstable market prices, deterioration of the goods, insolvencies, among others.

Agent Independence

This independence is relative to the business organization that has the commercial agent and not in terms of the performance of the agency, because the agency who commissions the business needs to have the powers to ensure that the agent meets the requirements to prepare the business.

Termination of the contract

The commercial agency contract may culminate in the same reasons as a mandate contract and because of the expiration of the same contract.

The duration of the contract can be defined or indefinite, however, an initial term of 1 or 2 years is usually determined.

Each party may terminate the contract as long as it gives prior written notice to the other party.

Reasons for terminating the contract include:

  • Failure to comply with your obligations
  • Exceptional circumstances not under the control of the parties.
  • Failure to patch any non-compliance.

In conclusion a commercial agency contract can boost your business with someone else who is a specialist in the distribution of products, it is the most effective way to break paths to other markets without taking on all tasks.

At Casa Fresca we are kept informed about every step of the process, for us it is essential to manage the commercial agency contracts to ensure an optimal distribution of our fruits.

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