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DEAR SIRS
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DEAR SIRS , We have this See also:day from you lb See also:American See also:Cotton, See also:net See also:weight, to be contained in American See also:Bales, more or less, to be delivered in See also:Liverpool, during on the basis of per lb for on the terms of the rules, bye-See also:laws, and Clearing See also:House regulations of the Liverpool Cotton Association, Limited, whether endorsed hereon or not. The See also:contract, of which this is a See also:note, is made between ourselves and yourselves, and not by or with any See also:person, whether disclosed or not, on whose instructions or for whose benefit the same may have been entered into. Yours faithfully, The contract, of which the above is a note, was made on the date specified, within the business See also:hours fixed by the Liverpool Cotton Association, Limited. per cent to us. Please confirm by See also:signing and returning the contract attached. The above See also:form of contract note illustrates the tendency of exchanges to alter the relations between the See also:broker and his See also:principal. The See also:object of inserting in the printed form the See also:pro-See also:vision that the contract is made subject to the rules of the Liverpool Cotton Association is to make those rules binding upon the principal, and if he employs his broker upon the basis of the printed form, he does bind himself to any modification of the relations between himself and his broker which those rules may effect. The object of the principal clause in the above and similar printed forms is apparently to entitle the broker to sell to or buy from his principal on his own See also:account and not as See also:agent at all, thus disregarding the See also:duty See also:incumbent upon him as broker of making for his principal a contract with a third party. It is not possible, except very generally, to See also:state how far exchanges have succeeded in imposing their own rules and usages en non-members, but it is probably correct to say that in most cases if the question came before the courts, the outside client would be held to have accepted the rules of the See also:exchange so far as they did not alter the fundamental duties to him of his broker. On the other See also:hand, provisions purporting to entitle the broker in disregard of his duties as broker himself to See also:act as principal, would be rejected by the courts as radically inconsistent with the See also:primary object of the contract of brokerage and, therefore, meaningless. But it is undoubtedly too often the practice of brokers who are members of exchanges to consider themselves entitled to act as principals and sell on their own account to their own clients, particularly in See also:futures. The causes of this See also:opinion, erroneously, though quite honestly held, are probably to be looked for partly in the See also:habit of acting as principal on the See also:market in accordance with the rules, partly in the forms of contract notes containing " principal clauses " which they send to their clients, and perhaps, also, in the occasional difficulty of effecting actual contracts on the market at the See also:time when they are instructed so to do. A stockbroker is a broker who contracts for the See also:sale of See also:stocks and shares. Stockbrokers differ from brokers proper chiefly in that stocks and shares are not " goods," and the requirement of a memorandum in See also:writing, enacted by the Sale of Goods Act 1893, does not apply. Hence actions may be brought by the principals to a contract for the sale of stocks and shares although no memorandum in writing exists. For instance, the jobber, on failing to recover from the buyer's broker the See also:price of shares sold, by See also:reason of the broker having failed and been declared a defaulter, may See also:sue the buyer whose " name was passed " by the broker. The employment of a stockbroker is subject to the rules and customs of the Stock Exchange, in accordance with the principles discussed above, which apply to the employment of brokers proper. A See also:custom which is illegal, such as the Stock Exchange practice of disregarding Leeman's Act (1867), which enacts that contracts for the sale of See also:joint-stock See also:bank shares shall be void unless the registered See also:numbers of the shares are stated therein, is not binding on the client to the extent of making the contract of sale valid. But if a client choose to instruct his broker to buy bank shares in accordance with that practice, the broker is entitled to be indemnified by his client for See also:money which he pays on his behalf, even though the contract of sale so made is unenforceable. For further See also:information the reader is referred to the See also:article STOCK EXCHANGE and to the See also:treatises on stock exchange See also:law. An See also:insurance broker is an agent whose business is to effect policies of marine insurance. He is employed by the person who has an See also:interest to insure, pays the premiums to the See also:underwriter, takes up the policy, and receives from the underwriter See also:payment in the event of a loss under the policy. By the custom of the See also:trade the underwriter looks solely to the broker for payment of premiums, and has no right of See also:action against the assured; and, on the other hand, the broker is paid his See also:commission by the underwriter, although he is employed by the assured. Usually the broker keeps a current account with the underwriter, and premiums and losses are dealt with in account. It is only in the event of the underwriter refusing to pay on a loss, that the broker drops out and the assured sues the underwriter See also:direct. Agents who effect See also:life, See also:fire or other policies, are not known as insurance brokers. See also:Ship-brokers are, firstly, commission agents," and, secondly, very often also See also:ships' managers. Their See also:office is to act as agents for owners of ships to procure purchasers for ships, or ships for intending purchasers, in precisely the same manner as house-agents act in respect of houses. They also act as agents for ship-owners in finding charterers for their ships, or for charterers in finding ships available for See also:charter, and in either See also:case they effect the charter-party (see See also:AFFREIGHTMENT). Chartering brokers are customarily paid by the ship-owner, when the charter-party is effected, whether originally employed by him or by the charterer. Charter-parties effected through brokers often contain a provision—" 22 % on estimated amount of See also:freight to be paid to A B, broker, on the signing of this charter-party, and the ship63i to be consigned to him for ship's business at the See also:port of X [inserting the name of the port where A B carries on business]." The broker cannot sue on the charter-party contract because he is not a party to it, but the insertion of the clause practically prevents his right from being disputed by the ship-owner. When the broker does the ship's business in port, it is his duty to clear her at the customs and generally to act as " ship's See also:husband. A See also:bill-broker was originally an agent who, for a commission, procured for See also:country bankers the discounting of their bills in See also:London. But the practice arose of the broker guaranteeing the London banker or financier; and finally the brokers ceased to See also:deposit with the London bankers the bills they received, and at the See also:present day a bill-broker, as a See also:rule, See also:buys bills on his own account at a See also:discount, borrows money on his own account and upon his own See also:security at interest, and makes his profit out of the difference between the discount and the interest. When acting thus the bill-broker is not a broker at all, as he deals as principal and does not act as agent. Additional information and CommentsThere are no comments yet for this article.
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