Factor (agent)

A factor is a type of trader who receives and sells goods on commission, called factorage. A factor is a mercantile fiduciary transacting business that operates in their own name and does not disclose their principal. A factor differs from a commission merchant in that a factor takes possession of goods (or documents of title representing goods, such as a bill of lading) on consignment, but a commission merchant sells goods not in their possession on the basis of samples.^[1]

Most modern factor business is in the textile field, but factors are also used to a great extent in the shoe, furniture, hardware, and other industries. The number of trade areas in which factors operate has increased.^[when?] In the United Kingdom, most factors fall within the definition of a mercantile agent under the Factors Act 1889,^[a] and therefore have the powers of such.^[3] A factor has a possessory lien over the consigned goods that covers any claims against the principal arising out of the factor's activity.^[4]

The term derives from the Latin for "doer, maker", from facit, "he/she/it does/makes". Historically, a factor had their seat at a sort of trading post known as a factory.

^ Christine Rossini, English as a Legal Language, 2nd ed. (London: Kluwer Law International, 1998), 103.
^ UK Legislation, Factors Act 1889, section 1(1), accessed on 17 July 2024
^ W.J. Stewart & Robert Burgess, Collins Dictionary of Law, 2nd ed., s.v. "factor" (Collins, 2001), 163.
^ Elizabeth A. Martin, ed., Oxford Dictionary of Law, 5th ed., s.v. "factor" (Oxford: Oxford UP, 2003), 196.

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[1] Christine Rossini, English as a Legal Language, 2nd ed. (London: Kluwer Law International, 1998), 103.

[2] UK Legislation, Factors Act 1889, section 1(1), accessed on 17 July 2024

[4] W.J. Stewart & Robert Burgess, Collins Dictionary of Law, 2nd ed., s.v. "factor" (Collins, 2001), 163.

[5] Elizabeth A. Martin, ed., Oxford Dictionary of Law, 5th ed., s.v. "factor" (Oxford: Oxford UP, 2003), 196.

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