Commercial brokerage is the activity of traders (commercial brokers) acting as intermediaries for parties buying and selling goods and providing commercial services in negotiating and signing contracts for purchasing and selling goods and supplying goods. commercial services for remuneration.
1. What is a commercial broker?
According to the Vietnamese Dictionary of the Institute of Linguistics, a broker is understood as a person who acts as an intermediary for two parties to contact and communicate with each other. Similar to the common understanding of brokerage, Article 150 of the 2005 Commercial Law defines commercial brokerage as follows:
Commercial brokerage is a commercial activity whereby a trader acts as an intermediary (called the broker) for parties buying and selling goods or providing services (called the broker) in negotiating, enter into contracts to buy and sell goods and services and receive remuneration according to the brokerage contract.
2. General regulations on commercial brokerage
Commercial brokerage was first regulated in the 1997 Commercial Law and continued to be regulated in the 2005 Commercial Law . To carry out commercial brokerage activities, the broker must be a trader and have a business registration to perform brokerage services.
The content of commercial brokerage activities usually includes: Searching for customers, providing necessary information about customers to the broker, introducing goods and services to be brokered, and conducting negotiations. Initially with the customer, agree on meetings and contacts between the brokered parties, and help the brokered parties draft contract documents when necessary.
Job brokerage activities, stock brokerage… are not considered commercial brokerage and are not regulated by the Commercial Law.
3. Characteristics of commercial brokers
Commercial brokers have the following characteristics:
– The subject of the commercial brokerage relationship includes the broker and the brokered party, in which the broker must be a trader, have a business registration to perform commercial brokerage services and does not necessarily have to have The registered business line coincides with the business line of the brokered parties. Current law does not stipulate whether the broker must be a trader or not. In commercial brokerage activities, not all brokered parties have a commercial brokerage relationship with the broker, but only the brokered party who signs a brokerage contract with the broker will develop a relationship between them. Create commercial brokerage relationships.
For example: Joint Stock Company A signs a contract to hire Limited Liability Company B to act as a broker in consuming products produced by Company A. A commercial brokerage relationship arises between Company A and Company B. . Company B finds Company C that wants to buy Company A’s products and introduces Company A to Company c. Therefore, a brokerage contract may or may not exist between B and c. If B and c sign a brokerage contract, a commercial brokerage relationship will also arise between them.
When using commercial brokerage services, the broker acts on its own behalf to have relationships with the brokered parties and is responsible for introducing the brokered parties to each other. After that, the brokered parties directly enter into contracts with each other. If they sign a contract with the customer on behalf of the brokered party, they will become an unauthorized representative of the brokered party. However, Vietnam’s Commercial Law does not prohibit the broker from authorizing the broker to sign a contract with the customer. In this case, the broker acts in the capacity of the representative.
– The content of brokerage activities is very broad, including many activities such as: searching and providing necessary information about partners to the brokered party, conducting activities to introduce necessary goods and services. broker, arrange for the brokered parties to contact each other, and help the brokered parties draft contract documents when they request. The purpose of brokerage activities is that the parties being brokered enter into contracts with each other.
Commercial brokerage is a pure business activity. The purpose of a commercial broker when performing brokerage is to seek profit. The broker usually receives remuneration when the brokered parties have entered into a contract with each other.
– The scope of commercial brokerage is expanded to include not only brokerage activities in buying and selling goods and providing commercial services related to the purchase and sale of goods. Therefore, commercial brokerage includes all brokerage activities with the purpose of making a profit such as commodity brokerage, stock brokerage, insurance brokerage, shipping brokerage, aircraft charter brokerage, etc. real estate brokerage… However, the Commercial Law is a general law regulating commercial activities, so the regulations on commercial brokerage in this law are only principles, while brokerage activities in each specific field are specifically regulated by specialized laws.
For example : Insurance brokerage is regulated in the Insurance Business Law, maritime brokerage is regulated in the Maritime Code…
– Commercial brokerage relationships are carried out on the basis of brokerage contracts.
The brokerage contract is concluded between the broker and the broker, the broker must be a trader and the broker does not necessarily have to be a trader (because the law does not stipulate anything about the conditions of the broker). agency). The object of the brokerage contract is the brokerage work to bridge the relationship between the brokered parties. In section 2 on commercial brokerage activities in chapter V, the 2005 Commercial Law regulates commercial intermediary activities without mentioning the form of commercial brokerage contracts. However, a commercial brokerage contract is a type of commercial service contract, so according to the provisions of Article 74 of the 2005 Commercial Law, brokerage contracts in particular and service contracts in general are expressed verbally. in writing or established by specific acts.
When entering into a commercial brokerage contract, the parties should agree on the specific content of the brokerage, the remuneration the broker will receive, the duration of the brokerage contract, the rights and obligations of the broker. obligations of the parties; liability for breach of contract; form of dispute resolution arising from brokerage contracts.
4. Rights and obligations of the parties in commercial brokerage relationships
4.1. Obligations and rights of the broker towards the brokered party
4.1.1. Obligations of the broker
Unless the parties agree otherwise, the commercial broker has the following obligations (Article 151 of the 2005 Commercial Law ):
– Do not disclose or provide information that harms the interests of the brokered party.
During the implementation of the brokerage contract, the broker may have to provide the broker with some information related to its business secrets. The broker may only use this information to perform brokerage in a direction that is beneficial to the brokered party and may not provide such information to the broker’s customers or competitors.
– Preserve samples of goods and documents assigned to perform the brokerage and must return it to the brokered party upon completion of the brokerage.
– Responsible for the legal status of the brokered parties but not responsible for their solvency.
As an intermediary, the broker is responsible for providing information and advice to the brokered party. The broker must be responsible for providing accurate legal status of the partner to the brokered parties. Based on the nature of the brokerage activity, the broker does not participate in the process of implementing the contract to purchase and sell goods or provide commercial services that has been signed between the parties. Therefore, we do not bear any responsibility for any breach of contract between the brokered parties. However, if legally authorized by one or more of the brokered parties, the broker can perform some contractual obligations such as delivering goods or receiving payment…
– Do not participate in implementing contracts between brokered parties, unless authorized by the brokered party.
4.1.2. Rights of commercial brokers
– Receive brokerage remuneration according to the level specified in the brokerage contract.
The broker’s right to receive remuneration arises from the moment the brokered parties sign a contract to purchase and sell goods or provide commercial services with each other, unless the parties have otherwise agreed (Article 153 of the Commercial Law). trade in 2005). That means that the failure of the brokered parties to perform the signed contract does not affect the broker’s right to receive remuneration at all. Such regulations are consistent with the broker’s function. because the broker cannot be responsible for the ability to perform the contract or the financial capacity of the parties. However, in a brokerage contract, the parties can agree that the brokerage fee will only arise after the contract between the parties is brokered under the conditions that the brokered party desires.
In cases where the brokered parties cannot enter into a contract with each other, the broker is not entitled to a brokerage fee, but if the parties do not agree otherwise, the broker still has the right to demand from the brokered party. Pay yourself reasonable fees related to brokerage.
If in the contract, the parties do not agree on the remuneration level, the brokerage remuneration level is determined according to the price of that type of service under similar conditions of supply method, geographical market, and payment method. and other conditions that affect service prices (Clause 2, Article 153, Article 86 of the 2005 Commercial Law).
4.2. Obligations and rights of the brokered party towards the commercial broker
4.2.1. Obligations of the brokered party
If the parties do not otherwise agree, the broker has the following obligations (Article 152 of the 2005 Commercial Law):
– Provide necessary information, documents and means related to goods and services;
– Pay brokerage fees and other expenses to the broker.
4.2.2. Rights of the brokered party
The 2005 Commercial Law does not stipulate the rights of the broker, however, based on the obligations of the broker, it can be seen that the broker has the following rights:
– Require the broker to preserve samples of goods and documents assigned to perform the brokerage and must return them to the broker after completing the brokerage;
– Require the broker not to disclose or provide information that is harmful to their interests.
