A Brief Look at Factors Under Early English Commercial LawThe Commercial Factor March/April 2016
David B. Tatge, a Member of the Firm in the Corporate Services, Health Care and Life Sciences, and Litigation practices, in the firm’s Washington, DC, office, co-authored an article in The Commercial Factor titled “A Brief Look at Factors Under Early English Commercial Law.”
Following is an excerpt:
Factors often acted as financiers by making advances to their clients against anticipated sales proceeds once consigned inventory was in hand, and they provided bookkeeping and collection services for accounts arising when the goods were sold. Beyond the role of commissioned sales agents, common law factors purchased goods in local markets for their distant principals as well and bought and sold goods for their own account, unless barred by their principals via contract from doing so (as the East India Company did).
The fee paid to the factor for services was known as a “factorage”; variously a “commission.” Factors were active in all manner of commerce, in transactions involving goods such as boots, coal, cocoa, cotton, corn, fish, flour, grain, hops, Indigo, jute, malt, oats, rice, silk, skins, sugar, tallow, timber, tobacco, wheat, wine, and wool.