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Simple English definitions for legal terms
commission merchant
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A quick definition of commission merchant:
A commission merchant is a person who sells things for someone else and gets paid a commission for doing so. They have control over the things they are selling and can sell them in their own name. They may also buy accounts receivable at a discount. In some cases, a commission merchant may also be in charge of managing property, like real estate. In Scotland, a judicial factor is a special type of commission merchant appointed by the Court of Session to manage an estate.
A more thorough explanation:
A commission merchant, also known as a factor, is an agent who is employed to sell property for the principal and who possesses or controls the property. They receive and sell goods for a commission.
For example, a clothing manufacturer may hire a commission merchant to sell their products to retailers. The commission merchant would receive a percentage of the sale as their commission.
A factor differs from a broker because the factor possesses or controls the property. They may sell the goods in their own name and have a general discretion as to their sale.
In addition to selling goods, a factor may also buy accounts receivable at a discount or act as a garnishee. In Scots law, a judicial factor is an administrator or factor specially appointed by the Court of Session to manage an estate.
Overall, a commission merchant or factor plays an important role in the buying and selling of goods, acting as an intermediary between the seller and the buyer.