WHO IS A MERCANTILE AGENT
A mercantile agent is a person who is appointed by those in business to act on their behalf or to represent them in dealing with other persons. The person on whose behalf he acts as an agent is known as the ‘Principal’.
WHO IS A MERCANTILE AGENT
There are a number of persons who help in taking the goods from producers to consumers. A producer may not be in a position to reach a consumer so he needs the help of various persons. This transfer process is highly organised and a formal one, with the goods passing from the manufacturer to the wholesaler and onto the retailer and then finally to the ultimate consumer.
“Mercantile Agent today plays a vital role in the transfer of goods from the producer to the ultimate consumer”.
It is crucial to remember that this order of steps needs to be meticulously followed in order to guarantee the rapid, secure, and timely delivery of goods to consumers. In order to examine the structure of domestic trade, it is important to emphasise the function of middlemen who transport commodities from their place of manufacture to their final destination.
MEANING OF A MERCANTILE AGENT
A mercantile agent is a person who is appointed by those in business to act on their behalf or to represent them in dealing with other persons. The person on whose behalf he acts as an agent is known as the ‘Principal’.
A MERCANTILE AGENT POSSESSES THE FOLLOWING CHARACTERISTICS
He has the authority to buy and sell goods on behalf of his principal or to consign them for the purpose of sale; He does not do business for himself, but he only represents his principal in all business dealings;He is a link between the principal and the third parties in so far as the business transactions are concerned;He is a business intermediary between the manufacturer and the ultimate consumer who helps in the transfer of goods without actually acquiring the ownership of the same;He is entitled to a commission from his principal, as a monetary consideration for his services.
IMPORTANCE OF APPOINTING A MERCANTILE AGENT
Since economic operations have developed so quickly, it is no longer limited to a village, town, or state. Even in the most isolated regions of the world, it is rapidly spreading and extending. In the modern world, trading relationships between business people from different nations are simple to establish.
With the development of transport and communication facilities and with the increase in large-scale production international trade has become possible. In this situation, businessman is faced with many problems, especially the problem of delegating responsibility and authority to a person who can execute the work on his behalf.
Moreover, the problems of time, distance and efficiency have also cropped up. So in order to overcome all these difficulties, need was felt for appointing a person who could work on behalf of the businessman and help him in carrying on his business more efficiently and smoothly.
Such a person today is known as a Mercantile or Commercial Agent and has become indispensable for modern business. Thus we see that Mercantile Agent today plays a vital role in the transfer of goods from the producer to the ultimate consumer.
DUTIES OF A MERCANTILE AGENT
PERFORMANCE OF DUTIES
An agent is bound by his agreement with his principal, to perform all the duties entrusted to him by the latter, to the best of his capability.
MAINTENANCE OF SKILL, CARE AND DILIGENCE
The agent should act with reasonable skill, care and diligence while discharging his duties. He is expected to execute his work on behalf of his principal with the same efficiency with which he performs his own work.
RENDER PROPER ACCOUNTS
The agent is expected to render true, correct and proper statement of accounts to his principal. He should not mix up the accounts of the agency with personal accounts and should intimate the principal from time to time on the financial position of the agency.
RETURN MONEY RECEIVED
Since the agent is the trustee of the wealth of the agency, he is bound to return all sums of money earned from the business to his principal.
DELEGATION OF AUTHORITY
The agent cannot delegate his authority to others without the prior consent of the principal. If the principal agrees, then an agent may appoint a sub-agent to help him and the sub-agent so appointed would be liable to the agent and not the principal.
NB: This article is not a legal advice, and under no circumstance should you take it as such. All information provided are for general purpose only. For information, please contact chamanlawfirm@gmail.com
WRITTEN BY CHAMAN LAW FIRM TEAM
EMAIL: chamanlawfirm@gmail.com
TEL: 08065553671, 08024230080