ICANBusiness LawLaw of Agency2025

Tunde was appointed as a del credere agent by Apex Foods Ltd to sell 1,000 cartons of milk at ₦10,000 per carton. Under the agreement, Tunde is entitled to a basic commission of 5% and a del credere commission of 2.5% on all sales. Tunde sold all 1,000 cartons on credit. However, credit customers who bought 100 cartons became insolvent and defaulted on payment. What is the net amount Tunde must remit to Apex Foods Ltd?

A₦8,250,000
B₦9,000,000
C₦9,250,000CORRECT
D₦9,500,000
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Why the answer is C, and why the others tempt you.
Total gross sales = 1,000 × ₦10,000 = ₦10,000,000. Total commission earned by Tunde = 5% (basic) + 2.5% (del credere) = 7.5% of ₦10,000,000 = ₦750,000. Because Tunde is a del credere agent, he personally guarantees payment by buyers and bears the risk of default (₦1,000,000 default). Therefore, Tunde remains liable for the gross proceeds less commission: ₦10,000,000 − ₦750,000 = ₦9,250,000.
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