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Del Credere Agent: A Comprehensive Guide to Its Legal Implications
Definition & Meaning
A del credere agent is a type of agent who provides a guarantee regarding the financial reliability of third parties involved in transactions on behalf of their principal. This means that if the third party fails to fulfill their obligations, the del credere agent is responsible for covering any losses incurred by the principal. In return for this added responsibility, the agent typically receives a higher commission on sales. This role is often recognized in English law and is sometimes referred to as a del credere factor.
Table of content
Legal Use & context
Del credere agents are primarily used in commercial transactions where there is a need for additional assurance regarding the solvency of buyers. This term is relevant in areas such as contract law and commercial law. Individuals or businesses acting as del credere agents may find legal templates useful for drafting agreements that outline their responsibilities and commissions. Users can manage these documents themselves using resources like US Legal Forms.
Key legal elements
Real-world examples
Here are a couple of examples of abatement:
Example 1: A manufacturer hires a del credere agent to sell its products to retailers. The agent guarantees that the retailers will pay for the products. If a retailer defaults, the agent must compensate the manufacturer for the loss.
Example 2: A real estate agent acts as a del credere agent by assuring a property seller that a buyer is financially capable of completing the purchase. If the buyer fails to pay, the agent is responsible for the loss incurred by the seller. (hypothetical example)
State-by-state differences
Examples of state differences (not exhaustive):
State
Key Differences
California
Del credere agents are recognized, but specific commission structures may vary.
New York
Del credere agreements must be clearly outlined in contracts to be enforceable.
Texas
There are additional regulations regarding the disclosure of commissions.
This is not a complete list. State laws vary and users should consult local rules for specific guidance.
Comparison with related terms
Term
Definition
Key Differences
Agent
A person authorized to act on behalf of another.
Del credere agents specifically guarantee third-party payments.
Factor
An agent who sells goods on behalf of a principal.
Del credere factors provide additional guarantees regarding payment.
Surety
A person who takes responsibility for another's performance.
Del credere agents act on behalf of principals, while sureties are typically separate parties.
Common misunderstandings
What to do if this term applies to you
If you are considering acting as a del credere agent, it's essential to draft a clear agreement outlining your responsibilities and commission structure. You can explore US Legal Forms for ready-to-use templates. If the situation is complex or involves significant financial risks, consulting a legal professional is advisable to ensure you understand your obligations and rights.
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