This article will help you to learn about the difference between a factor and a broker.

Difference between a Factor and a Broker

Factor

1. Possession:

A factor takes the possession of goods.

2. Dealings:

A factor deals in his own name and needs not disclose the name of the principal.

3. To Receive Payment:

A factor has the right to receive payments.

4. Liability:

A factor is always liable for his actions.

5. Remuneration:

Remuneration given to factor is known as ‘Commission’.

6. Insurable Interest:

A factor has insurable interest in goods he deals in.

7. To Receive Commission:

A factor receives commission from seller only.

8. Regularity:

A factor carries on the business of his principal regularly.

9. To Sue:

A factor can sue or be sued for contracts.

10. Lien:

A factor has a right of lien on goods in his possession for his unpaid charges.

Broker

1. Possession:

A broker does not take the possession of goods.

2. Dealings:

A broker deals on behalf of his principal.

3. To Receive Payment:

A broker has no right to receive payments.

4. Liability:

A broker is not personally liable.

5. Remuneration:

Remuneration given to broker is known as ‘Brokerage’.

6. Insurable Interest:

A broker has no insurable interest in goods in which he deals.

7. To Receive Commission:

A broker receives commission from both buyer and seller.

8. Regularity:

A broker is appointed for a specific dealing only.

9. To Sue:

A broker cannot sue or be sued for his contracts.

10. Lien:

A broker has no right of lien on goods in his possession for his unpaid charges.