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Question

Difficulty: MediumLaw of Agency: Creation, Authority, and Types of Agents

A textile manufacturer in Aba engages a mercantile agent to sell fabrics on credit to regional merchants. To safeguard against debt default, the manufacturer pays the agent an extra fee in exchange for a guarantee that all credit buyers will pay for the goods delivered. Which type of commercial agent has been appointed?

  1. Del credere agentAnswer
  2. B
    Factor
  3. C
    Broker
  4. D
    Universal agent

Answer

Del credere agent
A del credere agent is a mercantile agent who, for an additional commission called a del credere commission, guarantees that third-party purchasers will pay for goods sold on credit, assuming personal liability to the principal if the buyer defaults.

Step-by-Step Solution

1
Analyze the role and contractual duty of the agent in the scenario.
The agent receives extra remuneration in exchange for guaranteeing buyer payment and assuming financial liability for default.
Identifying the specific risk-bearing duty helps categorize the mercantile agent.
2
Match the agent's function with commercial law definitions.
An agent who guarantees third-party credit performance for extra commission is legally defined as a del credere agent.
This distinguishes del credere agents from factors and brokers who do not guarantee payment.

Key Concept

Types of Commercial Agents and Del Credere Commission
Estimated Time:1m 0s
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Topics

Law of Agency: Creation, Authority, and Types of Agents

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