Differences between an agency contract and a commission contract

Differences between an agency contract and a commission contract

If you want to know what the differences are between an agency contract and a commission contract, we will explain it to you below:

Both are commercial contracts that establish a relationship between a businessman and an intermediary acting on his own.

However, they have different characteristics that should be known.

In an agency contract, an intermediary (agent) undertakes to carry out acts on behalf of and on behalf of the employer, called the principal. The agent acts as a representative of the principal and must follow his instructions.

The regulations that regulate it establish the minimum and mandatory content of the contract, as well as the rights and obligations of the parties.

Some of the advantages of the agency contract are:

• It can include an exclusivity clause, which implies that the agent is the only one or the preferred one to promote or conclude the acts or operations of the principal in a certain geographical area or sector of activity.
• Generates the right of the agent to receive a remuneration, which may consist of a fixed amount, a commission or a combination of both.
• Grants the agent the right to compensation for clientele at the end of the contract, provided that it has contributed new clients to the principal or has increased operations with existing clients.

A commission contract is one in which the intermediary (commission agent) undertakes to carry out commercial management or sale of goods or services in his own name, but on behalf of another, called the principal. The commission agent acts as agent of the principal and assumes the risk and venture of the operations.

It is governed by the Commercial Code, which regulates the general aspects of the commercial mandate, but leaves a wide margin to the autonomy of the will of the parties to set the conditions of the contract.

Some of the advantages of the commission contract are:

• It does not usually include exclusivity clauses, since the commission agent can carry out operations with other principals or on their own account.
• Generates the right of the commission agent to receive a commission, which usually consists of a percentage of the price of the operation carried out.
• It does not grant the commission agent the right to compensation for clientele at the end of the contract, unless expressly agreed between the parties.

As can be seen, the agency contract is more stable and continuous over time, while the commission contract is momentary and occasional in nature.

Therefore, the choice between one or the other will depend on the type of activity to be developed and the interests of the parties.

You already know the main differences between an agency contract and a commission contract.