Legal Definitions - commission merchant

A commission merchant, also known as a factor, is an agent who is employed to sell property for the principal and who possesses or controls the property. They receive and sell goods for a commission.

For example, a clothing manufacturer may hire a commission merchant to sell their products to retailers. The commission merchant would receive a percentage of the sale as their commission.

A factor differs from a broker because the factor possesses or controls the property. They may sell the goods in their own name and have a general discretion as to their sale.

In addition to selling goods, a factor may also buy accounts receivable at a discount or act as a garnishee. In Scots law, a judicial factor is an administrator or factor specially appointed by the Court of Session to manage an estate.

Overall, a commission merchant or factor plays an important role in the buying and selling of goods, acting as an intermediary between the seller and the buyer.