What Are Committers And Principals?

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What Are Committers And Principals?
What Are Committers And Principals?

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In economic activity, civil law relations between the parties with the involvement of an intermediary are widespread. Lawyers in the field of registration of agreements call them representational agreements or contracts for executive order.

Participants in the mediation agreement
Participants in the mediation agreement

In civil law relations of an intermediary nature, three participants interact:

  • initiator of a transaction - a manufacturer of products, a service provider or another legal entity that sells goods or purchases something on the consumer market;
  • the person who is the final consumer - the purchaser of the goods or a third-party supplier of the products;
  • an agent acting as an intermediary between these two parties to the transaction, who receives his profit from the results of intermediary operations.

In business, when designating the set of rights and obligations that each of the parties to the agreement has, certain terms are used. They are necessary in order to reflect the specifics of the relationship between the parties. In some types of representation contracts, the agent is listed as a performer. In this case, the party that is the consumer of intermediary services is called the customer.

Conclusion of a contract
Conclusion of a contract

Basics of mediation

In situations where, when executing a transaction, it becomes necessary to transfer the authority to perform certain functions to a third party (be it an organization, an individual entrepreneur, an individual), such a type of GPC agreement as an agency agreement is used. Agency came to Russia from English and American law and is legally spelled out in the Civil Code of the Russian Federation (Chapter 52). The essence of the agreements between the parties to the agreement on the executive order is as follows: the intermediary (agent, commission agent, attorney), on the basis of the order of the customer (principal, principal, principal), performs legal or actual actions for a certain fee.

In the powers of the intermediary, variability is allowed:

  • the agent can act on behalf and at the expense of the person who initiated the transaction;
  • The agent has the right to act on his own behalf, but at the expense of the person who attracted him to the transaction.

Regulation of agency agreements

When in the contractual process the mediator is assigned the role of an independent participant (he negotiates with third parties and concludes transactions with them on his own behalf), we are talking about the execution of a commission agreement. The committent is not recognized as a party to the transaction, since using the services of a commission agent, he delegates his powers to him. The rules stipulated by the 51st chapter of the Civil Code of the Russian Federation apply to the legal relations of the parties.

If the agent acts on behalf of the principal, then their relationship is within the framework of the agency agreement and must be built in accordance with the provisions of Chapter 49 of the Civil Code of the Russian Federation. The intermediary acts as an attorney, acts on the basis of a power of attorney issued to him by the principal, and is not a party to the transaction.

Thus, the economic content of representative activity in agency, commission and commission is not the same, and therefore these relations are documented in different ways. Reference and information resources of the Internet offer such a diagram of the ratio of various types of agency contracts.

Relationship diagram of agency agreements
Relationship diagram of agency agreements

The regulations that must be followed when drawing up agency agreements are prescribed by article 1011 of the Civil Code of the Russian Federation. When choosing a model of the concluded contract, one of the fundamental criteria is the following: on whose behalf the intermediary enters into legal relations with a third party.

Varieties of agency agreement

In Russian legislation, for the legal support of intermediary relationships, three forms of documentary registration are provided:

  • the agency agreement - the principal authorizes the agent;
  • the commission-committing agreement involves a commission agent;
  • the contract of commission - the trustee entrusts the attorney.
Parties to mediation agreements
Parties to mediation agreements

Each model of the contract has certain conditions, taking into account which the rights and obligations are distributed between the parties. These conditions in jurisprudence qualify as essential, and they are as follows.

  1. By concluding an agency agreement, the principal initiates the transaction and participates in it at his own expense. At the same time, he turns to the help of an intermediary and is a direct customer and consumer of agency services. The principal has the right to instruct the agent to perform on a reimbursable basis both legal and other (actual) actions. An agent may be authorized to act on his own behalf, but at the expense of the principal, or to act on behalf and at the expense of the principal. Depending on this, the rights and obligations for the financial and economic operations carried out arise either directly from the agent or from the principal himself.

    The most in demand are agency services in areas such as studying market needs and conducting advertising campaigns, mastering new trading platforms and searching for counterparties.

  2. In the contractual relationship, built on a commission basis, the principal and the commission agent participate. A person in need of the services of an intermediary and engaging him to carry out actual actions (transactions) is the consignor. Based on the results of the work, he pays the agent a fee. The commission agent, acting as an intermediary between the seller and the end consumer, acts in the interests and at the expense of the principal, but on his own behalf. This means that the rights and obligations under transactions with third parties are acquired by the commission agent, while the principal himself is not a party to the transaction.

    The commission agreement was most widespread in the field of supplying goods to retail stores, when making transactions with real estate and buying a car, purchasing bills of exchange and currency.

  3. The conclusion of a contract of agency means that the agent must personally take any legal action. The parties to the contract of agency are the trustee and the attorney. An agent acting as an attorney acts on behalf and at the expense of the principal on the basis of a power of attorney received from him. In this case, the agent is not a party to the transaction, all rights and obligations arise for the principal.

    A surety is used to participate in a transaction through its special representative - a stock broker, lawyer, payment attorney, etc.

At first glance, the agreements on executive surety existing in Russian law may seem a little cumbersome and complicated. In addition to the supplier and the buyer, another party is involved in them - an agent acting as an intermediary. However, it will not be difficult to classify the terms denoting the participants of a particular representation agreement, since they are in a clear relationship with the nature and volume of intermediary functions that the customer assigns to the contractor involved.

Fork of agency agreements
Fork of agency agreements

Is it possible to identify the concepts of the principal and the principal

In the framework of the legal registration of mediation, the terms "principal" and "principal" refer to the party that initiates the contractual relationship. Translated from Latin, these words respectively mean "instructing" and "chief". Both the one and the other are the customer and consumer of intermediary services: they instruct the agent to perform certain tasks, for which they are paid remuneration. Can concepts so close in meaning be recognized as the same?

Obviously, it is impossible to completely identify the principal and the principal: they appear in different representation contracts; the ratio of rights and obligations that they, as parties to the contract, are endowed with when making a transaction, each has its own.

  • A client is a person who uses the services of an intermediary, but under the terms of the contract, he can instruct a third party to act only on his own behalf.
  • The principal is the one who, authorizing another person to act as an agent, chooses at his own discretion how the intermediary will act - on his own behalf, or on behalf of the principal.

Consequently, it is permissible to call the committent the principal, but on the contrary, it is not always possible, since the concept of the principal is much broader than the committent.

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