Analysis about the relevance of the commercial agency and its alignment with the international trade of goods and services

Abstract

The international commercial trade is crucial for the economic development of countries and the global market. In the nowadays, it is very important to study and to understand international contracts, designed to regulate the commercial relationships between parties from different countries. Commercial Agency is a contractual relationship created with the purpose of developing any business within a specific geographical area previously defined by the parties. This contractual relationship is created by a Principal and an Agent who has the knowledge about the commerce on a specific region. Hence, this type of contract is used as a legal instrument to ease the entrance of foreign businesses into different countries and achieve an international impact. The purpose of this article is to study the main elements that conforms the Commercial Agency instrument. This paper should help understand its benefits, flaws and how it is affected by the absence of an unified global regulation. The regulation of the Commercial Agency in Colombia will also be discussed in order to get awareness of the implications of building a legal bond by using this contractual figure. On the other hand, we will analyze modifications requested at this subject from the United States through the Free Trade Agreement in order to illustrate the possible scenarios faced by parties using this legal tool.