The sole agent determines one of the commercial types of agent. The term is in the possession of the sole right to perform the principal in a designated geographic area. The sole agent similar to the regional agent is entitled to have a commission from all contracts with customers which are from her or his assigned territory. However, the regional agent is differently related to sole agent in the case of using the additional right. Sole agents use the additional right where even marketing action of the principal in the specified agent's territories and the sales are excluded unless the contract agreement of commercial agent particularly provides otherwise.
Agreement of Article 15.5
There is special reference related to the person associated in the business where one of the parties is the sole distributor, the sole agent, or sole concessionaire of the other.
The wording of the Agreement of Article 15.5. in World Trade Organization (WTO) has two objectives:
- The first one is proving a clear departure from the term held in certain valuation systems where the sole agents are by their nature regarded to their suppliers.
- Objectives of the second Article 15.5. is direct consideration of the connection of parties entirely within the provisions of article 15.4.( in WTO).
Granting an agent sole right
The right to be a sole agent, either in a state territory or for specific products is a worthwhile right because it gives an agent a monopoly. Sole rights can be imputed even in the failure to attend a written agreement. One of the examples is the seller who engages a North American agent into representing its goods. Assuming that the seller does not receive any other agents in the territory and the relationship keeps up a period of time, a sole-type relationship can be presupposed by a court when asked to consider the relationship upon termination. The more problematic example is when a European seller nominates an agent in Canada and this agent begins opening the American market. The European seller when goes to nominate an American agent, it can find itself facing a claim through a Canadian agent that, in virtue of the course of conduct, that is the sole agent for North America. Because of that the amount of notice which has to be given to the agent for termination will be affected. However, in some countries, the agent cannot be completed without reason, this can have a far more grave repercussion .
Examples of Sole agent
- A real estate broker or agent who has exclusive rights to market and sell a property in a specific area.
- A custom broker who has exclusive rights to clear goods through customs on behalf of a particular company or individual.
- An advertising agency that holds the exclusive rights to develop and execute marketing campaigns for a particular company or brand.
- An exclusive distributor who has exclusive rights to distribute products or services in a particular region or market.
- An exclusive representative who holds exclusive rights to represent a particular company or organization in a particular area.
Advantages of Sole agent
A sole agent is an agent who has been granted exclusive rights to represent a principal in a given geographic area. There are several advantages to appointing a sole agent, including:
- It allows a company to benefit from the specialist knowledge and expertise of the sole agent, who is often more familiar with the local market than the principal.
- It reduces costs associated with advertising and marketing, as the sole agent has the exclusive right to market the product or service in their area.
- It allows for improved customer relationships, as the sole agent can provide more personalized service and attention.
- It can help to ensure a better quality of service, as the sole agent is held to a higher standard than other agents.
- It can help to ensure greater uniformity of service and product quality, as the sole agent is responsible for all sales in the area.
Limitations of Sole agent
A sole agent is a type of commercial agent who is the only one in possession of the sole right to perform the principal's activities in a designated geographic area. This type of arrangement has some limitations, including:
- Limited reach: Having only one agent in a given geographic area limits the principal’s ability to reach potential customers or clients in other areas.
- Difficult to monitor: It can be difficult to monitor the performance of a single agent and ensure that they are doing their job properly.
- No competition: A sole agent may have no incentive to work hard, as there is no competition among agents to win the principal’s business.
- Limited resources: With only one agent, the principal may not have access to the resources necessary to cover a larger geographic area.
A sole agent is a type of commercial agent that is granted exclusive rights to act on behalf of their principal in a designated geographic area. Other approaches to commercial agents include:
- A commission agent, who is appointed to enter into transactions on behalf of the principal, but does not have the authority to bind the principal.
- A general agent, who is granted authority to act on behalf of the principal in all matters related to a certain type of business.
- An exclusive agent, who is appointed to act on behalf of the principal in a certain type of business, but does not have exclusive rights in the designated area.
In conclusion, the sole agent is the only commercial agent who is granted exclusive rights to act on behalf of their principal in a designated geographic area. The other approaches to commercial agents include commission agents, general agents, and exclusive agents.
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Author: Alicja Ryszka