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Legal Developments worldwide

Modernised commission agent act

June 2010 - Corporate & Commercial. Legal Developments by Delphi.

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A new act on commission agents has been in force since 1 October 2009. It replaced the commission agent act from 1914. A commission agent buys or sells in his/her own name but on behalf of another person. This means that the other contracting party is under the belief that s/he is entering into an agreement with a seller, e.g. a car dealer, but the financial interest lies with a third party, such as an importer who owns the car. The car dealer receives commission on the transaction, in about the same way an agent would. The person selling something for someone else (car dealer) is called a commission agent and the car importer is called the principal. However, the most common form of commission agent transaction takes place in securities on stock exchanges etc.


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