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Chapter Twelve Agency Agreements:Proposal, Negotiation and Closure Section 1 Introduction A large volume of the world’s trade is conducted through the agency system. There are three types of agents: general agents, sole or exclusive agents, and ordinary or commission agents。 The principals seeking agents abroad and prospective agents each have concerns about the other and need to negotiate terms of contract in a careful manner. Section 2 Specimen Documents Specimen 1: Asking a firm or individual to represent you We have been in touch with the consular section of your Embassy at Beijing, which recommended your firm as a possible agent for porcelain ornaments in Finland. We manufacture porcelain ornaments and hope to increase our exports to overseas markets. We are seeking an organization that can introduce and handle a considerable amount of business. Kindly let us know if you are interested in representing us, and if you consider that the volume of business you can obtain would warrant our granting you a sole agency. Our export price list, catalogue and a sheet giving full details of agency commission and terms are enclosed. We look forward to hearing from you. Specimen 2: Accepting an agency (a positive reply) We were very pleased to receive your letter … offering us the agency for your porcelain ornaments. We are certainly willing to be your agents and sell your products throughout Finland. When you draw up an agreement …, we suggest the inclusion of the following points: We operate as Sole Agents for a period of three years, after which period the contract will be renewed annually. A commission of 7?% will be paid on all sales, whether from us or direct from customers. Monthly accounts of sales will be kept and sent to you. We will accept your quarterly drafts for the net amount. We agree not to handle any imported competitive products. All advertising expenditure for the first year will be refunded by you, thereafter to be divided equally be
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