Principal Explanations

The term client, which comes from the Latin word committens, is linked to the verb commit: undertake, make a mistake or, in the field of commerce, grant a commission. Client is the adjective used to describe the one who commits.

The figure of the principal appears in the field of business. It is about who carries out the commission of a commercial commission. The principal agrees with the commission agent a certain price as a quota for the development of commercial management.

It can be said, therefore, that the principal entrusts the commission agent to carry out a commercial act on his behalf. The principal must grant the commission agent the necessary resources to fulfill the order, reimburse him for the expenses and pay him what was agreed.

In other words: in a commission contract, the principal orders the commission agent to manage his commercial interests in exchange for monetary compensation (also known as commission). In general, this commission is a percentage of the total value of the transaction carried out. The principal also has the obligation to guarantee that the commission agent has the means to comply with the mandate and to render it harmless from any damages that may occur in the framework of the commission.

In a commission contract, the important thing is that the two parties, the principal and the commission agent, agree and that the aspects they have agreed upon are included in it. However, it is vital that it has a series of characteristics or identity signs such as the following:
-Neither party will be represented by anyone, that is, both are involved in the contract and participate directly in the contract. mentioned relationship.
-The commission agent must have the obligation to render accounts to the principal on the action that has been delegated to him. Specifically, you must bet on telling you where you are, how you are evolving or what operations and movements you are going to carry out.
-In the event that the commission agent, at a certain time and due to different circumstances, makes the decision not to proceed with the order that they had agreed upon, he must notify the principal as soon as possible and as quickly as possible. It is the way that the latter can look for alternatives or another commission agent for the same work.
-Under no circumstances is the commission agent allowed to delegate the functions that the principal had delegated to another person. You can only do it if you communicate it to him and he gives the go-ahead.

Regarding this type of contract, we can establish that there are two classes: on his own behalf, when the commission agent performs the action that has been delegated to him and does not reveal who the principal is, or on behalf of the principal, when he does.

Suppose a person makes homemade sweets. This individual can act as a principal by hiring a commission agent to sell his products in a certain neighborhood. Both parties agree that, for each sale, the principal will pay the commission agent a price equivalent to 15% of the value of the transaction. Thus, if the commission agent achieves sales for 1,000 pesos, the principal will pay him 150 pesos.