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.