A Short Note on the term “Del Credere Commission”

Sometimes the principal gives extra commission to the agent for the recovery of credit sales made by him. Thus cash realization becomes his duty. There are chances of bad-debts out of credit sales. In order to compensate him for bad-debts loss, some extra commission is given which is known as Del Credere Commission. This extra commission is calculated on the total amount of sales unless it is especially given that extra commission to paid only on credit sales. In others words, for the ordinary commission, the agent is not responsible for any bad debt that may occur. If for credit sale some amount cannot be collected, the consignor will suffer the loss. If the agent has to be made responsible, he will have to be paid on extra commission, called Del Credere Commission. For such a commission, which is payable on total sales, the agent will be responsible for any bad debt, However, if the amount cannot be collected because of any dispute, the agent will not be liable.

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