All of the following are indicators that the vendor is acting as an agent instead of as a principal, except: A. The other party is primarily responsible for fulfilling the contract. B. The vendor has latitude in establishing prices for the other party's goods or services. C. The vendor does not have inventory risk. D. The vendor's consideration is in the form of a commission.

Question

Arely Montgomery

Business

1 September, 01:02

All of the following are indicators that the vendor is acting as an agent instead of as a principal, except: A. The other party is primarily responsible for fulfilling the contract. B. The vendor has latitude in establishing prices for the other party's goods or services. C. The vendor does not have inventory risk. D. The vendor's consideration is in the form of a commission.

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Answers (1)

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Desmond Andrews · Answer 1

The correct answer is B. The vendor has latitude in establishing prices for the other party's goods or services.

Explanation:

In an ideal scenario, both sellers and buyers should agree on the price and conditions of a product, in order to avoid speculation and subsequent conflicts. In the event that a seller is the one who has the freedom to decide the conditions such as price or distribution, he is acting as a commercial agent, since he is autonomously deciding on aspects that should correspond to the buyer as the main agent.