A del credere factor is an agent who ensures that the person they enter into a contract with on behalf of their client will make payment for the goods or services received. They receive an increased commission for providing this guarantee. While they are not obligated to have the authority to make contracts themselves, they must be capable of fulfiling their responsibilities.
A del credere factor is an agent who guarantees the solvency of a third party with whom they make a contract on behalf of the principal. The agent takes possession of the principal’s goods and ensures that anyone who purchases the goods on credit will promptly pay for them. In exchange for this guarantee, the agent receives a higher commission for their sales. It is widely accepted that the promise of a del credere factor is not subject to the statute of frauds. For example, a clothing manufacturer may hire a del credere factor to sell their products to retailers. The del credere factor guarantees that the retailers will pay for the goods they purchase on credit, and if a retailer fails to pay, the del credere factor is responsible for the payment. In return for this guarantee, the del credere factor receives a higher commission. The role of the del credere factor is to act as a guarantor for the principal, ensuring that the third party will fulfil their payment obligations. This provides a level of security for the principal, who may not have the means to pursue legal action against a non-paying third party. The del credere factor assumes the risk of non-payment and is compensated for this risk through a higher commission.
A Del Credere factor is a person or entity that guarantees the payment of a debt owed by a buyer to a seller. They act as a surety and assume the risk of non-payment by the buyer.
The role of a Del Credere factor is to provide an additional layer of security to the seller by guaranteeing the payment of the buyer’s debt. They ensure that the seller will receive payment even if the buyer defaults.
By having a Del Credere factor involved in a transaction, the seller can mitigate the risk of non-payment. If the buyer fails to pay, the Del Credere factor will step in and fulfill the payment obligation, protecting the seller’s financial interests.
Yes, a Del Credere factor can be held liable for the buyer’s non-payment. They have assumed the risk of non-payment and are legally obligated to fulfill the payment obligation if the buyer defaults.
No, a Del Credere factor is not required in every transaction. Its involvement depends on the agreement between the buyer, seller, and the Del Credere factor. It is typically used in situations where there is a higher risk of non-payment.
Yes, a Del Credere factor can charge a fee for their services. The fee is usually a percentage of the transaction value and is negotiated between the Del Credere factor and the seller.
If the Del Credere factor fails to fulfill their payment obligation, they can be held liable for breach of contract. The seller may seek legal remedies to recover the amount owed, including filing a lawsuit against the Del Credere factor.
Yes, a Del Credere factor can terminate their agreement with a seller. However, the terms of termination would be outlined in the agreement between the parties. Generally, there may be notice requirements and potential financial consequences for early termination.
There are no specific legal requirements for becoming a Del Credere factor. However, it is essential to have a solid understanding of the legal and financial implications involved in guaranteeing payment obligations.
If a Del Credere factor is unaware of any fraudulent activity and acts in good faith, they may not be held liable for fraudulent transactions. However, if they are found to have been complicit or negligent in facilitating fraudulent transactions, they may face legal consequences.
This site contains general legal information but does not constitute professional legal advice for your particular situation. Persuing this glossary does not create an attorney-client or legal adviser relationship. If you have specific questions, please consult a qualified attorney licensed in your jurisdiction.
This glossary post was last updated: 17th April 2024.
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