Good day
Thank you for assisting
The following from the perspective of the middleman:
1. In a situation where triangle trade takes place, the middleman will have to sign 2 contracts (to keep buyer/producer apart). With which party is (1 of the 2) contracts signed first? (In this case the middleman must first receive funds from the buyer and then pass it on to the producer).
2. Assume the middleman has first signed a contract with the buyer (which can only take place if the supplier delivers on his word (but with a contract not signed yet), and the supplier pulls out - what is the damage? Will the buyer have a case to sue the middleman?
3. Assume the middleman signs a contract with the producer (first) and then the buyer pulls out (no contract signed with buyer yet) - is the middleman liable for buying the goods from the producer?
4. How can the middleman "prevent" this possible event?
5. At what point does the "deal" become secure?
Sincerely,
J Reichert
Quoting from [Juane]
I think that the answers to your questions depend upon how you are presenting your services to your clients. It seems to me that there are two main types of middlemen:
1. Agents - where you merely introduce the buyer and the seller for an agreed upon fee or commission payment. The upside to this arrangement is that contracts and payments are the responsibility of the buyer and seller and your role is to merely inact the introduction or possibly more as a translator, quality control etc. The downside here is that if your client does not see your services as adding value then they may try to cut you out of the deal. You can try to secure your fees by way of an exclusivity contract but at the end of the day if you are not adding a value then the buyer and seller will find a way to cut you out of the deal.
2. True middle men - in this case the buyer is your customer and the seller is your supplier. You basically offer and sell a product to your customer and you in turn buy this product from your supplier. In these cases you would generally be working off a margin added onto the price of the goods. The upside here is that your customer does not know who the supplier is and vice versa. The downside is that you are legally responsible to both your buyer and supplier. If you enter into production and the buyer pulls out then you will still be responsible for the production that you orderd on behalf of your customer. So you need to be sure that the customer is legit BEFORE you place the order with your supplier and you need to ensure payment from that customer. You also need to be sure that your supplier can deliver on that order.