DEL CREDERE AGENCY

• Date: 06 February 2019

"A del credere agent is described in Bowstead on Agency, (12th Ed.) at p. 3, in the following words: "A del credere agent is a mercantile agent who, in consideration of extra remuneration, called a del credere commission, guarantees to his principal that third persons with whom he enters into contract on behalf of the principal shall duly pay any sums becoming due under these contracts." The learned author continues at page 4 thus: "In effect a del credere agent is a surety for the persons with whom he deals A del credere agency may be inferred from a course of conduct between the parties ........................." The obligation of the agent is confined to answering for the failure of the other contracting parties, owing to insolvency or the like, to pay any ascertained sums which may become due from them as debts. An examination of the agreement between parties to the present Appeal shows that the agent (the appellant) received a monthly commission which was fixed 1/per ton for all sales which have been paid for by the customers with a guaranteed fixed sum of £50. This is shown in clause 5 of the agreement, Exhibit E. Six months later, a new agreement, Exhibit L, was entered into. In clause 5 of that agreement there is provided a commission of 1/-3d per ton for the first 1,500 tons and 1/- for all exceeding quantities, with a guaranteed fixed sum of £75 per month. The question is, can it be inferred from these agreed commissions that a higher reward or commission was paid to the appellant in order to make him responsible to indemnify the respondents for the default of customers? A test has been laid down in a few cases. In the case Sutton & Co. v. Grey (1894), 63 L.J.Q.B. 633 Lord Esher, M.R. quotes the following passage from the judgment of Baron Alderson in Couturier v. Hastie, 22 L.J. Exch. 97 where the learned Judge laid down the test for distinguishing a contract of guaranty - a special promise to answer for the debt of another person within the Statute of Frauds, and a contract of indemnity: - "The other and only remaining point is whether the defendants are responsible by reason of their charging a del credere commission, though they have not guaranteed by writing signed by themselves. We think they are. Doubtless, if they had for a percentage guaranteed the debt owing, or performance of the contract by the vendee, being totally unconnected with the sale, they would not be liable without a note in writing signed by them; but, being...