COMMERCIAL

AGENCY

Ta Diu Thuong, LLM

LECTURE’S CONTENT

Part I: General introduction

on Commercial Intermediate activities
Part II: Types of Commercial Intermediate
activities (under VCL 2005)
1. Representation of Traders
2. Commercial Brokerage
3. Dealers
4. Commercial Agency
COMMERCIAL
INTERMEDIARY ACTIVITIES
USA: Consensual relationship authorizing one party
(the agent) to act on behalf of the other party (the
principal) subject to the principal’s control.

Main legal tools:

1.Civil Code
2.VCL
3.Specialized laws
4.By-laws
Role of Agency:
1. Deep knowledge of Agent
2. Appropriate facilities and staff for more efficient biz
expansion
3. Creation of trusted business network to acquire
larger market
4. Create bigger volume of trade (goods/services)
flow
II. 1 - Representation of
Traders
1. Art. 139 of VCC defines Representation as the act
of a person (the representative) to establish and
perform a civil transaction in the name and interests
of another person (represented person) within the
scope of representation.
2. Art. 141 of VCL defines Representation of
traders as an activity whereby a trader
(representative) is authorized by another trader
(nominator) to conduct commercial activities in the
name and under the instructions of the latter for
remuneration.
 1 + 2 = RoT is representation at law in
commercial activities
II.1 Representation of Traders -
Features
1. Both Representative and Nominator must be trade
persons. While dealing with Representative,
Nominator acts on his own name, but when dealing
with 3rd party Nominator acts from Rep’s behalf.
2. While dealing with 3rd person, actions of the
Nominator regard as Rep’s own
3.  Rep and Nominator have very close relationship
4. Such a relationship depends on Contracts for
representation of traders where all or part of
commercial activities.
5. Usually this is for biz opportunities seeking and
negotiations
6. This is a special kind of contract whereby
remuneration is a compulsory requirement
II.1 Representation of Traders -
Features
7. Both parties must have business license and
professional license where applicable.
8 This is also a service-contract
9 Forms: Art. 142 VCL – written and other forms of legal
validity
10 Compulsory content requirement was removed from
VCL 2005, but the recommended content exist
11 Trade person authorizes his own staff to represent and
act on behalf shall not be subject of RoT
12 Representation must be closely related to main filed of
biz activities.
13 Rights and Obligations – Art. 145-149, VCL
II.2. COMMERCIAL BROKERAGE

Definition:
Commercial activity whereby a trader acts as an
intermediary (broker) between parties selling and
purchasing goods or providing commercial
services (principals) in the course of negotiations
and entering into contracts for sale and purchase
of goods or provision of services and shall be
entitled to a remuneration under a brokerage
contract.
II.2. COMMERCIAL BROKERAGE
Broker
1. Must have license but law doesn’t require him to be
trade person
2. Act on his own name while dealing with parties. If
succeed, parties will conclude contract themselves
3. Wide range of activities with sole purpose – get parties
concluded contracts
4. Sole commercial purpose of brokerage is remuneration
5. Each field has its won regulations for brokerage in that
industry
6. Basic = brokerage contract, not provided by VCL
7. Rights and obligations of parties  Art. 151-154 VCL
II.3. MANDATED DEALERS

Definition: Commercial activities whereby the

mandatory conducts the purchase and sale of
goods in his/her/its own name under terms agreed
upon with the mandator and is entitled to receive
mandate remuneration.
II.3. MANDATED DEALERS

1. Mandator can/not be trade person and can mandate to

one or more mandatories to complete the tasks.
2. Sub-mandate to a third party is not allowed unless
written agreement of mandator.
3. Act form his own name and thus legal consequences
will be on mandatory’s burden
4. Mandatory must be licensed, otherwise mandated
contract is void
5. Mandated dealer contract shall include: contact
negotiation, implementation of mandated deal and of
the contract with 3rd party.
6. Only specific good for specific contract can be
mandated. Such good is subject of contract with 3rd
party but not of mandated contract.
7. Rights and obligations of parties  Art. 162-165
II.4. COMMERCIAL AGENCY

Definition:
Commercial activities whereby the principal and the agent
agree that the agent, in its own name, sells or purchases
goods for the principal or provides services of the principal
to customers for remuneration (Art. 166)

Principals and agents:

• Principals are traders that deliver goods to agents for sale or
provide money to agents for purchase of goods, or traders that
authorize the provision of services to service-providing agents.
• Agents are traders that receive goods to act as sale agents or
receive money to act as purchase agents or accept the
authorization to provide services.
Forms of Agency

Off-take Agent sell a whole quantity of goods or

agency provide a complete service.
Exclusive Sell specific goods or provide specific
agency services in a specific geographical area.
General Agent organizes a network of sub-agents
agency under its name, management and
representation.
Other forms As agreed by the party
of agency

(Article 169-VCL)
II.4. COMMERCIAL AGENCY
Rights and Obligations

Require principal Require principal

pay money, deliver provide guidelines,
goods Right information
of
Agents
To be paid legitimate
Off take agency can remuneration,
make decisions on benefits
price of goods, arising from agency
services. activities

Can sign with 1 or

more principals
 Sell goods, Comply strictly the
services at the negotiation of
price fixed by deliver goods,
principal receive money

May only sign Comply the civil

the contract Obligation
obligations
with 1 principal of Agents

Pay money to
principal (sale
agent,agent
To be providing
supervised Preserve services)
by the goods Deliver purchase
principal good( purchase
agent)
 Fix prices of good
purchased or sold or
charge rate of
services

Request agency
Fix agency Rights of to take security
prices
Principals measures

Request agents to Inspect and

make payments or supervise the
deliver goods under performance of
the contracts contracts

Art. 172 – VCL 2005

 Guide, supply
information and
facilitate agents

Bear Pay remuneration

responsibility for Obligations and reasonable
quality of goods of expenses to agents
and services Principals

Return assets used Bear joint responsibility

to agents at security for law violation acts of
upon the termination agents if such law
of the contracts violation acts are partly
because of the principals’
faults
Art. 175 – VCL 2005