Is There A Way To Protect A Source Intermediary From Being Stiffed By Controlling Intermediary?

[illias]

Hi Davide,

You last Q&A was on the schematic:

Thus as per below typical string contract Schematic-

(1) Supplier/ AND OR registered Mandate holder(2) Sourcing intermediary

(2) Sourcing intermediary

(2) Sourcing intermediary

(2) Sourcing intermediary

(3) INTERMEDIARY BUYER/SELLER

(4) Sourcing intermediary

(4) Sourcing intermediary

(5) END BUYER/AND OR REGISTERED MANDATE HOLDER

First, the example is an absurdly long chain.  But, is there any contract that can give a source intermediary a fighting chance of a commission if the controlling intermediary wants to cut you out?  For example, if you are a lawyer & can litigate for free, can you have a document that might brow beat an unsavory controlling intermediary to yield and give you a fair shake?

[Jerrin]

Dear Kipley

No you can't - The chain indicates that only at the end of the actual offer stage only- Three people are actually closing on the deal - 1, 3, and 5-

Nearly most deals start with an  average of  5 sourcing intermediaries - 10 intermediaries is not uncommon-

So you get a Jet fuel offer from a supplier - You ask end buyers directly ,  who say they don't want it- then naturally you may as well get buyers side intermediaries to also help you source end buyers- is the most logical way to go-  accordingly you really cannot avoid intermediaries becoming involved , hence what is your option? Control the deal and the intermediaries from the very start-

Thus general acceptable  trading position is 1, 3, 4,5

In all cases the goal is to arrive at 1,3, 5-

So your lawyer is going to write up a contract in your country  to enforce against an buyer/seller in another country like Brazil- Try and catch such a person if he does a runner- Try and catch such a person who cannot be touched in many counties because no   extradition agreements are in place-

Try and catch a runner who is now flushed with cash- and can afford mega bucks to take YOU on-

Famous case in Florida years ago- crude oil- 5 intermediaries  were jilted , the buyer seller ran to New York with 4 million per month in commissions- Even trying to gt Citi Corp to release details of the  circumventor's account was simply not possible- they needed to prove first that such a deal was closed- they couldn't- not to the satisfaction of a court- So they spilled the whole  story to the Florida times-nevertheless nothing could be done.

Finally afer spending 100,000 in legal fee's and a few hundred thousand more in court costs the  Buyer/seller  intermediary says 'I have 2 cents in my pocket" -what are you going to do then-

It all about the law of Torts-  Failure to provide a duty of care- Sure you lawyer can write such a contract- if you are not prepared to enforce it at horrific expenses then what was the point?

you are not buying a car or house- this in an international transaction - many laws and barrier's  prevail - at huge costs-

How does you contract protect you as per above ?

I  can go on and on and on-

If are not even privy to the deal if you have not control over it -  You  need to prove that the buyer/seller did  make profit and circumvented everyone- How can you do that to a deal- You are not privy to? You can't.

You have a "stepping back" process - that's one deal(Commission protection) So you get rid of all intermediaries involvement in the sales contract-for protection of commissions-then you have another deal related to the buy /sell part of the transaction- ultimately involving only 3 people-

So you will spend 1000's dollar to  "legally" tie a buyer/seller up when after 3 weeks he tells you "Sorry the deal fell through"

How long can you do that for?- It would have cost me millions to do so, for no return-

I am dealing with  a lot of end buyer and suppliers directly and still can't close  one large " Hit the jackpot deal"  per year-

You take control and become the buyer/seller by simply learning procedures- or your second less effective option is to  becomne attached to one accordingly- if you know procedures  then what are you doing being attached to a buyer/seller who is practicing incorrctly in the first place?

Thus it is UP to you to either control the deal as a well informed Buyer/seller or be informed that you are attached to a buyer/seller who knows what they are doing- Also of which 99% of such don't know what they are doing- either way YOU MUST now procedures-For you own protective benefit- There is no other way effective way to guarantee or party ensure commission payments -

When ftn deal with intermediaries- ftn allows transparency to apply - meaning that, they do all the work as per my instructions  ad I  close any viable deal- This keeps the intermediary informed themselves if a deal has succeeded or failed-

There are differing way to remain in control- but keeping control of the deal is a must protocol.

Hope above helps-

All the Best

Davide Papa

www.ftnexporting.com

www.ftnx.9f.com