PERSPECTIVES
Agent or principal, and who decides it.
Two intermediaries can run the same transaction and hold two different exposures. The difference is settled by conduct, and it is settled by other people.
The question is answered too late.
Most files arrive with this already decided in the wrong direction. Someone chose a template, the parties negotiated the fee, and the label on the front page was treated as the decision. The decision is taken later, by other readers.
Those readers are a customs officer, a tax administration, a bank and, eventually, a judge. None of them is bound by the heading, and none of them reads the recitals first.
Four facts, and none is the title.
An intermediary that never owns the goods, but issues its own sales invoice, sets the resale price and holds stock, is a principal. The commission clause does not survive the contradiction, and nobody argues it.
The reconstruction is done on documents that already exist: invoices, customs declarations, insurance certificates, stock records. It is quick, and it does not require anyone's cooperation.
- Who holds ownership of the goods.
- Who carries the loss if they are damaged, or never sold at all.
- Who is exposed if the end buyer does not pay.
- Whose name appears on the invoice to that buyer.
The hybrid is the only unsafe one.
Either position is defensible and either can be priced. What cannot be defended is the arrangement where the paperwork says commission and the invoicing, the stock and the pricing say principal.
The hybrid is almost never designed. It accumulates: a template inherited from an older deal, an invoice issued to solve a cash problem, one shipment taken on own account because the buyer needed it that week.
A delivery term is not a deed.
A three-letter delivery term does not decide ownership, and the belief that it does is expensive. It allocates delivery, cost and the risk of loss in transit. Ownership is decided by the governing law and by the contract, or not at all.
There is a second trap underneath. Several legal systems carry their own codified versions of the familiar shipping terms, and those versions do not always track the current international edition. Naming the term without the edition invites one.
Ownership retained against nobody.
A clause reserving ownership until final payment is written for one scenario, the insolvency of the buyer. In that scenario it is worth whatever can be shown against third parties, and that turns on form and on date.
Printed in unsigned standard terms on the back of an invoice, it operates against the buyer alone. That is the single party against whom it was never going to be needed.
Representation can be presence.
A representative who routinely negotiates and concludes for a foreign principal can make that principal present in the country. So can one who holds stock to fulfill the principal's supplies, for purposes the principal never chose.
The consequence lands on the principal, not on the representative, and it lands years after the arrangement felt like an economy. It is the cheapest thing to check and the last thing checked.
Requalification arrives from outside.
A representation agreement drafted as a private commercial arrangement can match, in substance, the statutory definition of a registered commercial agency in the country where it is performed.
Requalification is not a contractual event and no clause invites it. It arrives from outside the document, carrying registration conditions, notice periods and indemnity consequences nobody had priced.
The signal is easy to look for. The contract says nothing at all about its position relative to the local agency regime, which is how one knows nobody checked.
The classification carries a rate.
For a long time this was a private allocation of commercial risk between two parties. It is now also a licensing question, a customs question and a tax question, each answered by a different authority reading the same set of papers.
The activity a license enumerates, the party named as importer of record and the rate applied to the margin all follow from the same four facts. A file where they disagree answers no authority cleanly.
Acting as agent does not move product exposure to the producer either. Consumer and product regimes tend to reach whoever put the goods into the market, and that is rarely the plant.
Where this shows early.
Three checks reach the answer before any authority does. The last shipments, with the customs declaration, the tax invoice and the delivery term set beside one another.
Then the license wording against the invoice descriptions, line for line. Then who would bear the loss if the goods were destroyed tonight, and whether any signed document says so.
The choice between the two positions is commercial, and it can still be changed while the file is small. What cannot be changed afterwards is a record in which the parties said one thing and behaved as the other. That record is read by everyone later, and it was written deliberately by nobody.