What is the distinction between a commercial agent and a non-agent? How is a commercial agent distinguishable from a sales representative?
What will be an ideal response?
Several characteristics commonly distinguish commercial agents from distributors and other non-agents. First, agents generally do not maintain their own inventory of goods; instead, they take orders on behalf of their principal. Second, agents usually are compensated through the payment of a commission when a sale is completed. Third, agents seldom bear the financial risk of nonpayment by the purchaser. Fourth, agents often possess the authority to contract on behalf of their principals. Sometimes courts make a distinction between a commercial agent and a sales representative. Both are agents. However, the term "sales representative" often is used to describe an agent who does not possess the authority to contract on behalf of its principal. Whereas a commercial agent can bind its principal to a contract with third persons, a sales representative may only solicit business. The principal must finalize the agreement itself.
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