Del Credere Agency

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DEFINITION of 'Del Credere Agency'

In business law, a del credere agency is a type of principal-agent relationship wherein the agent acts not only as a salesperson or broker for the principal, but also as a guarantor of credit extended to the buyer. If the buyer is unable to pay the bill after the transaction is completed, a del credere agent may become liable for the amount that was unable to be collected.

INVESTOPEDIA EXPLAINS 'Del Credere Agency'

A del credere agent can most easily be understood as a combination of a salesperson and an insurance firm. Notably, a del credere agent only becomes liable to pay the principal after the buyer defaults on payment. If the principal is unable to collect for some other reason, such as a dispute over the goods delivered, the del credere agent is not liable. Payment for the insurance services is made in the form of an additional sales commission, known as a "del credere commission".

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