I choose for a Commercial agent

A commercial agent is a self-employed intermediary who has continuing authority to negotiate the sale or purchase of goods (or services) -, - on behalf of and in the name of the principal. He does not buy the goods from the principal and logically neither resells them.

• A commercial agent has a power of attorney to identify, visit and negotiate (prospect) customers in a given territory but usually will not be entitled to actually conclude/confirm the orders as (1) he does not assume the commercial risk and (2) this power of representation would create a permanent establishment. The commercial agent has a continuous authority, not occasional, to promote the principal’s goods/services. The commercial agent transmits the orders to the principal who may or may not confirm them.  
• The principal delivers the goods and sends the invoice directly to the customer. It is thus the principal and the customer who are the parties to the contract of sale.
• The commercial agent is rewarded with a commission agreed upon with his principal. His services are subject to VAT (taxable transactions) but instead of using an invoice, they are most often honored on the basis of a commission note, established by the principal and submitted to VAT by the latter through the reverse charge mechanism.
• The commercial agent usually does not participate in the execution of the contract of sale. Transportation, invoicing, customs formalities and the payment are dealt with directly between the principal and the buyer.
• In most countries, the rights of a commercial agent are protected by mandatory rules of law. A contract is required to counterbalance some aspects of this statutory protection. (See section « additional information »).

Additional comments

Checklist for a commercial agency contract

Model contracts:

• International Chamber of Commerce : Model Contracts and Clauses
• International Trade Center: Model Contracts for Small Firms

I choose for a Commission (undisclosed) agent

A commission agent is a self-employed intermediary who acts on behalf of another person, called the "principal", but enters into the contract in his own name. He often intervenes to facilitate, from an administrative point of view, a contract that was agreed upon directly between the principal and the customer.

• The contract of sale is concluded between the principle and the customer. The commission agent is no party to this legal relationship.  
• The commission agent is, often on an occasional basis, in charge of the administrative formalities of the transaction (import formalities, VAT, etc.). The principal addresses his invoice to the commission agent (1st invoice) and the latter addresses a new invoice in his own name to the customer (2nd invoice). This second invoice includes a commission of which the rate has been agreed upon in advance between the commission agent and the principal as the commission agent assumes no commercial risk in the transaction. The relationship between the principal and the commission agent on the one hand and between the commission agent and the customer on the other hand is this in essence of an administrative nature.
• The commission agent takes care of the import/customs formalities and VAT registration (when applicable).
• The principal continues to assume the commercial/payment risk and debt administration.

I choose for a Distributor

A distributor (also referred to as (general) importer or reseller) is an independent intermediary that acts in his own name and for his own account. A distributor buys goods/services from his supplier (often the manufacturer) in order to resell them on a foreign market on his own terms.

• The distributor is not simply a reseller; the distributor is linked to the manufacturer (supplier) by a closer tie. In particular, the following characteristics should be noted:
• in its capacity as a reseller, the distributor deals with the promotion and/or organization of distribution (usually of standardized products under the trademark of the supplier) in the assigned territory ;
• in return the supplier confers a privileged position in the territory on the distributor: a guarantee of supply and generally the exclusive right to purchase the products from the supplier;
• the relationship must be for a certain duration and sets conditions for collaboration that, by definition, cannot be occasional.
• the relationship creates a fairly close tie of loyalty between the parties, which usually implies that the distributor refrains from distributing competing products;
• The clients place their orders with the distributor.
• The supplier enters into a contract of sale with the distributor (1st invoice).
• The distributor resells the goods/services to his customers (2nd invoice) with a profit margin as he is assuming the commercial (payment) risk in the operation. He is not remunerated with a commission rate, agreed upon with the manufacturer.
• Logistics, the risk of non-payment and the administrative formalities (invoicing, import formalities …) are concentrated (‘consolidated’) on the distributor.
• In most countries, this relationship is not regulated by the law (‘unnamed contract’) thus allowing the parties to organize their rights and obligations freely. A good contract should fill this void defining the parties rights and obligations clearly and in sufficient details.

Additional comments

Checklist for a distributorship contract

Model contracts:

• International Chamber of Commerce : Model Contracts and Clauses
• International Trade Center: Model Contracts for Small Firms