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CMA Intermediate · Business Laws and Ethics · Special Contracts - Indemnity and Guarantee; Bailment and Pledge; Laws of Agency

A person who carries on business in his own name, sells goods for a principal and receives a commission, usually with authority to sell at a price and on credit terms he fixes within limits, is best described as a:

Such a person is a commission agent, a mercantile agent who sells goods for the principal in return for commission and has possession of the goods. A sub-agent is appointed by an agent, a surety gives a guarantee, and a pawnee holds pledged goods.

  1. ACommission agent (mercantile agent) who has possession of goods for saleCorrect
  2. BSub-agent
  3. CSurety
  4. DPawnee

Explanation

A commission agent buys or sells goods for the principal for a commission and has possession of the goods or documents of title as a mercantile agent. A sub-agent is appointed by the agent, a surety guarantees a debt, and a pawnee holds goods as security.

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