Definition
A del credere commission is a supplemental fee paid to an agent or factor in exchange for the agent's personal guarantee that the buyers to whom the agent sells goods on the principal's behalf will pay their debts. The agent who accepts this arrangement — known as a del credere agent or del credere factor — assumes liability for the solvency of the buyers the agent introduces and for the timely discharge of those buyers' obligations. In effect, the agent steps into a position resembling that of a surety or guarantor, promising that the third-party purchaser will perform.
The arrangement has two moving parts: the ordinary agency relationship, under which the agent sells on the principal's account, and the overlaid guarantee, under which the agent answers personally if a buyer defaults. The additional commission compensates the agent for bearing this credit risk.
Common Language
This term has no ordinary English counterpart. "Del credere" is Italian commercial terminology, meaning roughly "of trust" or "of belief," carried directly into English mercantile and legal usage without translation. Researchers should not expect to find it defined in general-language dictionaries.
Core Elements
The del credere arrangement requires:
1. An underlying agency: The del credere agent must be acting as agent for a principal — selling goods or otherwise transacting on the principal's account, not as a buyer and reseller in the agent's own name.
2. An additional or enhanced commission: The guarantee is not gratuitous. The agent receives a premium above the ordinary commission rate in exchange for assuming the credit risk.
3. A guarantee of the buyer's performance: The agent warrants both the solvency of the buyers the agent selects and the punctual payment of the sums those buyers owe. This is broader than a mere representation of creditworthiness.
4. Secondary liability with a trigger: The del credere agent is not primarily liable in the first instance as a co-debtor. Liability ripens when the buyer defaults — that is, refuses or neglects to pay. The principal cannot bypass the buyer and sue the agent directly without first establishing the buyer's default.
Why It Matters in Research
The del credere commission appears frequently in nineteenth- and early twentieth-century commercial law materials, particularly in cases involving merchant factors, import-export transactions, and commodity trading. Researchers working in that period should be alert to several points.
First, the del credere arrangement sits at the boundary between agency law and suretyship. Some courts and commentators treated the del credere agent's obligation as a guarantee (a secondary obligation), while others characterized it as something closer to an indemnity or a primary commercial obligation. The distinction matters because guarantee contracts in many jurisdictions fell under the Statute of Frauds and required a written memorandum, raising the question whether del credere commissions needed to be in writing to be enforceable. Courts were divided.
Second, the Bouvier's entry is truncated in its description of when the principal may sue the agent — the source text breaks off at "refused or neglected to." The operative rule from the case law underlying the Bouvier's citations is that the principal must first demonstrate the buyer's default before pursuing the del credere agent. Researchers relying solely on the Bouvier's snippet should consult the underlying reporters.
Third, the del credere agent's liability runs to the principal, not to the buyer. The buyer's legal relationship is with the principal; the del credere agent's guarantee is collateral to that relationship. Confusing the direction of the obligation is a recurring error in secondary summaries.
Fourth, the term rarely appears in modern statutory commercial law, which tends to absorb similar arrangements under general suretyship, guaranty, or consignment provisions. Researchers analyzing a modern transaction that resembles this structure should search under those headings in UCC Article 2 (consignment and sale-or-return) and general state guaranty law rather than expecting to find "del credere" indexed.
Historical Dictionary Support
Bouvier's defines the del credere commission as one under which the agent, in consideration of an additional payment, guarantees to the principal not only the solvency of the debtor but the punctual discharge of the debt, with the agent liable from the moment of default without prior demand from the debtor — though the principal cannot sue the factor until the buyer has refused or neglected to pay.
The Bouvier's entry accurately captures the commercial core of the arrangement and correctly identifies both the solvency and the timeliness components of the guarantee. Its brief citation to English Chancery and common law reporters (reflected in the volume and chapter references in the entry) anchors the definition in mid-Victorian commercial jurisprudence, when the del credere factor was a recognized and common figure in Anglo-American trade.
What Bouvier's does not address: the Statute of Frauds question, the treatment of del credere obligations under American law specifically, and the gradual displacement of the arrangement by modern consignment and credit structures. Researchers should treat the Bouvier's entry as a reliable starting point for the doctrine's shape but an incomplete guide to its legal boundaries.
Jurisdictional Note
English courts developed the bulk of the foundational del credere doctrine, and American courts largely followed English authority through the nineteenth century. Some American jurisdictions applied Statute of Frauds requirements to del credere guarantees; others did not, treating the additional commission as sufficient consideration to remove the arrangement from that statute's scope. Modern researchers should check the applicable state's guaranty statutes and Statute of Frauds provisions before assuming the historical rule applies.
Encyclopedia Cross-Reference
See Law Mind Encyclopedia — Agency (for the principal-agent relationship underlying the arrangement); Commercial Factors and Brokers (for the historical role of factors in trade and the del credere variant); Suretyship and Guaranty (for the secondary liability dimension and Statute of Frauds issues).