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Dimitry K., Esq.
Dimitry K., Esq., Attorney
Category: Business Law
Satisfied Customers: 41220
Experience:  Run my own successful business/contract law practice.
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I am a business entity acting as an independent agent for the

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I am a business entity acting as an independent agent for the sale of large equipment overseas. The sellers (a cooperative) is fronted by a another LLC as their representative (receiving a set fee). The sellers are claiming inability to fold into the sale price a second fee to cover my efforts because of the representative's fee. I am asked to secure my agent's fee of about 7.5% from the buyer, exposing my position for negotiation. Is this an acceptable practice? I have a non-circumvention agreement with both the seller and buyer.

Thank you for your question. Please permit me to assist you with your concerns.

To answer directly, if you are acting as an independent agent for both parties, then it is really irrelevant who pays you your commission, be it the buyer or the seller. But if you are representing the seller in this endeavor, then unless the buyer agrees otherwise, the seller is responsible to cover your expenses purely due to whom you represent. This is not an illegal practice, but ultimately what governs is whatever agreement or contract your have in place. If there is no contract, the seller can bully you. Otherwise you can compel him to cover costs. In some instances both the buyer and seller can agree to each cover a share of your fee as well. Here, since there is an agreement in place, you can demand the fee from the buyer but the back-up position would be the seller.

Good luck.

Dimitry K., Esq. and 3 other Business Law Specialists are ready to help you
Customer: replied 3 years ago.

In this case, I am told that the seller as a backup is not even an option due to legal limitation--the seller is a cooperative. Will it be within bounds for me to indicate that the fee is non-negotiable to the buyer or is everything negotiable to a certain degree?

Thank you for your follow-up, Fernando.

If the buyer was not a part of the agreement pertaining to what your fee would be (meaning that what agreement you have in place does not expressly designate your fee percentage), then the fee is negotiable. But at the same time you can let them know that the fee is non-negotiable based on industry standard (if there is one), or based on assurances provided to you by the parties before you got involved in this process. The parties can try to negotiate with you, but it would be up to you as to whether or not agree to negotiate or not.

Good luck.

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