Wednesday, January 21, 2009

The Case of Ng and Singh

The Case of Ng and Singh

Similar to Ms. Singh somewhere I read about nightmare novices attempting to import bubble gum candy to Canada. Without stipulating that each gum ball should be individually cellophane wrapped in the commercial invoice notes or sales agreement what arrived from the exporter was one giant melted gum ball weighing several pounds. The moral of the story is put it in writing.

Sugar itself also represents a mercurial heat and humidity hazard product as well, its pricing peaks in 1974 with a secondary spike occuring in 1980 and possibly another this year adds not only to the volatility but also danger of exporting or importing this sticky commodity as noted following the great Boston Molasses Disaster of 1919 which killed 21 people and injured around 150. Sugar should not be considered lightly.

"Views of the International Sugar Organization" (Willers and Jolly, Food and Agriculture Organization of the United Nations, 2003)

"The Molasses Disaster of January 15, 1919"

In terms of Ms. Singh's business relationship with Mr. Watt, the business world is no longer/may have never been a realm of easy spit and handshake deals or "my word is my bond" credos, where some Sheikhs (or Sheikhas) may still wave a magic stick over a patch of sand and decree, "build it there" a more prudent level of business trust includes actual written and specified contracts which clearly express the terms of international business and transaction.

If Ms. Singh was appointed an exclusive agent for the importer and arranged purchase from an undisclosed seller's agent she should be able to provide exclusive rights with respect to procurement of the product with an exclusivity clause that ensures Mr. Watt is legally bound to her agency and is not permitted to hire anyone else for this particular procurement or threaten to alter/lower or forego agency fees based on failure to disclose or full disclosure of seller's identity.

Non-disclosure agreements in terms of supplier may be supportable dependent upon the particular national laws and in fact Ms. Singh may seek to arrange similar non-disclosure with reference to her buyer under the terms of agency. If Mr. Watt is in agreement this protects their mutual interests as to possible price fixing or collusion on pricing where the buyer is known with properitary or confidentiality clauses.

Buyer and seller agents are then able to meet in the shadow of some anonymous mollasses keg and limit the terms of purchase or sale to quantity, quality and price rather than other pesky details which could foreseeably mire the transaction in costly or sticky delays. If both agents are given permission under the terms of agency to mutually disclose the identity of the buyer to the seller and vice versa it would be in both of their interests to ensure that obligations of agency (which are a two way street) are met. If these remain unwritten none need necessarily oblige them.

Otherwise, Mr. Ng is just as exposed to risk loss of agency commission as is Ms. Singh. So Singh and Ng might choose to include specifications regarding reservations to possibly lock in their commissions to long-term buying and selling customer relationships between Mr. Watt and the undisclosed seller.

Binding commissions agreements would need to be in place to ensure both Ng and Singh were paid their dues as both principals (both buyer and seller) may just seek to circumvent the entire commissions process once they have been revealed to each other. Attaching agency non-disclosure or confidentiality agreements to their agency activities as a concession for full obligations of agent clauses would also ensure Ng and Singh actually get paid for their hard work. Otherwise they might be quite stuck.

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