Chapter Ten

Agency

Translation• 发票上所载重量• invoiced weight• 超期两周• two weeks overdue• 为履行 2345 号订单所装运的货物• the goods shipped against our order No 2345• 按照双方同意的规格• in conformity with the agreed specification• 给贵方汇寄 300 美圆以赔偿损失• remit to you USD 300 in compensation for the loss

Translation• 留给你们提出一个解决问题的方案• leave it to you to suggest a solution• 对事情作出调整，使你们满意• adjust a matter to your satisfaction• 对该麻烦负责• be responsible for the trouble• 向船运公司提出索赔要求• lodge your claim with the shipper• 向你们做出合理的赔偿• make you a reasonable compensation

Questions for discussion

• What role does an agent play in business?• What is the main factor which should be taken

into account before conclusion of an agency agreement?

Why is agency necessary?• A vast amount of international trade is handled

not only by direct negotiations between the buyers and the sellers but also by means of agencies. An important reason for appointing a foreign agent is that he has all necessary knowledge of local conditions and of the market in which he will operate. He knows what goods are best suitable to his area and what price can be acceptable in the market.

What is agency?• Agency means that the agent signs contracts

with a third party on behalf of the principal or does other matters relating to the sales in compliance with the instructions from his principal, while the principal shall be responsible for the agent’s business activities and the obligations incurred therein. The rights and obligations of both parties are determined by the agency agreement. Their relationship is that of sales on a commission basis.

What is the main content of an agency agreement?

• The agency agreement usually stipulates the commodity, validity, territory, minimum purchase amount, payment terms, terms of price, exclusive rights and obligations, remedial measures for breach of the contract, market information etc.

Some main types of agencies:

• The commission agency;• The sole/exclusive agency;• The general agency.

The commission agent

• The commission agent may be a firm or a person who act upon the instructions from his principal to sell goods on the best terms obtainable. He charges a certain amount of commission for his services under some kind of agreement or contract.

The sole agent

• The sole agent is a person or a firm acting exclusively for one foreign principal with sole (exclusive) rights to sell on a commission basis certain commodities in a certain area in accordance with the agreement concluded.

The general agent

• The general agent is regarded as the representative of the principal and in general the acts of the agent are taken as those of the principal.

Looking for an agent Dear Mr. Morikawa, We are a mobile phone manufacturer with a company based in Malaysia and factories in China. Our major purchasers come from Europe and Southeast Asia. We are planning to expand our business to the U.S.A. and you have been highly recommended to us as having been most successful in marketing mobile phones. We would like to ask if you are interested in representing us. Your prompt reply is highly appreciated.

Yours sincerely,

•Giving background information

•Expressing intention•Expressing expectation

Applying for sole agencyDear Mr. Shek, We learned from the Business News that you are looking for a reliable firm with good connections in the synthetic fabric trade to represent you in Japan. We have been in the fabric business for more than ten years. We import synthetic fabric from Taiwan for our buyers. As we have had experiences in marketing products like your own, we are familiar with buyers’ needs and confident that we could expand your sales in Japan. We have showrooms in Japan, which is an advantage as many buyers have offices and factories in China. Moreover, we have an experienced sales team who is able to promote your products energetically. We hope to hear and look forward to the possibility of representing your products in here. Yours sincerely,

• Giving background information for the following application

• Present the intention

Appointing an agent Dear Sirs, We have received your letter of January 24 and are favorably impressed with your proposal for an agency agreement between us. In view of your excellent performance in pushing the sales of our manufactures and the satisfactory business records, we have decided to appoint you as our sole agent for our Panda Brand Recorders in the territory of Iran. We have drawn up a draft sole agency agreement in which the terms and conditions are set forth in details. Please examine it and tell us if they meet with your approval. We hope the establishment of agency will further expand the business to our mutual benefit. Yours faithfully,

•Acknowledging receipt of the application

•Stating the decision

•Further relevant details

•Expectation

Agreeing to a request for becoming a sole agencyDear Sir, It is our pleasure to learn from your letter of 12 July that you are willing to act as a sole agent for marketing our goods in Hong Kong. After a careful consideration, we have approved your proposal and decide to entrust you with the sole agency for our products in the territory of Hong Kong. We have drafted the agreement, and we would like you to go over and confirm the enclosed draft agreement with detailed terms and conditions, namely: That the agency commences on 1st January next and is terminated on 1st January, 2008, subject to renewal. That the agency is a sole agency for marketing our manufactures in Hong Kong. That you undertake not to handle competing products of other local manufacturers. That we pay you quarterly a commission at 5% based on the total sales of our goods in Hong Kong. That all accounts are settled at the end of each year. That you keep a full range of our products in your showrooms. It will be appreciated if you confirm these terms at your earliest convenience. A formal agreement will then be drawn up and copies sent for your signature. Yours sincerely,

•Acknowledging receipt of the application•Our agreement

•Details of the agreement

•Expectation

Declining a request for a sole agency Dear Mr. Sue, We thank you for your letter of 5 September, requesting to be the agent of our products in Hong Kong. As we have already appointed the Fam Company as our agent, we are sorry we are not able to appoint you as our agent. We would let you know if we need a new agent in the future. Yours sincerely,

•Acknowledge-ment

•Our decision (declination)

•Friendly greeting

Task

• Now please analyze the structure of the other sample letters to see how different parts of each letter are arranged.

Common structuresA letter aiming to find an agent usually includes

the following elements: (1) Relevant background information or

reasons; (2) Introduction of agency to be granted; (3) Expressing expectations.

Common structuresA letter applying for agency has the following components: (1) Stating the purpose directly in the opening paragraph; (2) Giving reasons for the application (e.g. there are

opportunities waiting to be developed, or the applicant can offer particular assistance to the prospective principal);

(3) Presenting supporting information, e.g. references to convince the reader that the applicant is reliable;

(4) Expressing expectation for granting of the expected agency.

Common structures

A letter replying to an application usually contains the following elements:

(1) Acknowledging receipt of the application; (2 ) Responding to the application and giving

decisions; (3) Expressing expectations for good

cooperation or a friendly close.

Classroom activity

• Suppose you are decision-makers of a big business. You have received two applications for your agency. Analyze the following data and discuss with your classmates about the following question: which company would you grant your agency? Give your reasons for your decision. When you have decided, draft a letter granting your agency.

Suggested answers

• You can make their decision by themselves as long as they can justify yourselves. So answers to this question are open-ended.

• An example: It is wiser to grant agency to Company B as it is more capable of promoting our products. Among all the factors relevant to agency-granting, the ability of promoting should be put in the most important place.

Exercise A 参考答案：• for as With from on to for for under

Exercise B 参考答案：• 我公司是为从事进出口业务及其他与国际贸易相关的业务而成立的。• 整件事情的症结在于贵方对获取并执行的订单所要求的佣金这一问题上。• 详细回顾过我们的商业关系及贵方过去对推销我方产品所做出的努力，我们决定同意贵方为你们地区我们鞋类产品的独家代理商。• 如果贵方在本地已有代理商， 请不必回复本信。• 我方乐意了解贵方代理我方产品的条件，以及贵国从事贸易的一般条件。• 代理商扮演着制造商市场营销大军的角色，随时告知他们市场的最新进展， 同时充当制造商在市场上的耳目的角色。• 我方想知道贵方是否同意该代理协议。• 作为我方的独家代理商，贵方应保证不销售其他我们的竞争对手生产商的产品，也不能把我方的产品转出口到其他国家。

Exercise C 参考答案• entitled volume scope developed exploit • interested exert eliminate agreeable outline

Class work

• Exercise D

Exercise D 参考答案• 1. 本协议所提到的商品数量、价格及装运条件等，应在每笔交易中确认，其细目应在双方签订的销售协议书中作出规定。• 2. 在本协议期满时，以及乙方完成了第二款所规定的总数额，甲方应按装运货物后所收到的发票累计总金额付给乙方 12% 的佣金。• 3. 同时，乙方应随时向甲方提供其他供应商的类似商品样品及其价格、销售情况和广告资料。• 4. 若未能达成协议，则本争端应提交中国国际贸易促进会对外贸易仲裁委员会，根据该会仲裁程序暂行规定进行仲裁。• 5. 对双方政府间的贸易，甲方有权按其政府的授权进行有关的直接贸易，而不受本协议的约束。乙方不得干涉此种直接贸易，也无权向甲方提出任何补偿要求。