Definition
An agent who, in consideration of extra commission (del credere commission), guarantees to the principal that third parties with whom the agent deals will pay their debts — the agent bears the credit risk of buyers they introduce.
A del credere agent is a commercial agent who takes on the additional responsibility of guaranteeing the solvency of the buyers they introduce to the principal. If the buyer introduced by the del credere agent fails to pay, the del credere agent must pay the principal — they are essentially a surety for the buyer's payment, in addition to acting as an agent for the sale. In return for this extra risk, they receive a higher commission (del credere commission). Del credere agents are common in international trade, where the principal cannot independently assess the creditworthiness of overseas buyers.
Statutory Definition
No specific statutory definition in the Indian Contract Act — a del credere agent is a specialised form of agent under the general law of agency (Sections 182-238 ICA). The del credere obligation is essentially a contract of guarantee (Section 126 ICA) combined with an agency. However, because it is a commercial promise by a businessperson for their own commercial interest, the requirement of written guarantee (Section 126 — 'a guarantee may be either oral or written') is satisfied.
Etymology & Origin
From Italian 'del credere' (of belief, on trust) — the phrase reflects the agent's promise to vouch for the creditworthiness of buyers they introduce. The agent 'believes in' the buyer's ability to pay and stakes their own money on that belief.
Full Legal Analysis
Del Credere Agent: Agent Plus Guarantor
The del credere agent occupies a unique dual role: they are simultaneously the principal’s sales agent (introducing buyers, negotiating terms) and the guarantor of those buyers’ payments. This combination concentrates both the commercial opportunity and the credit risk in the del credere agent — they profit from successful transactions and bear the loss when buyers default. The extra commission (del credere commission) is the price the principal pays to transfer credit risk to the agent.
Del Credere Agent’s Dual Obligation
The del credere agent’s two obligations: (a) As Agent: To find buyers, introduce them to the principal, negotiate contracts, and facilitate sales — standard agency duties of loyalty, care, and accounting. (b) As Guarantor: To pay the principal if any buyer introduced by the agent fails to pay — the agent stands surety for each buyer’s creditworthiness. These obligations are separate: the agent's duties as agent are subject to the law of agency; the guarantee obligation is subject to the law of guarantee (Section 126 ICA).
Commercial Importance
Del credere agents are particularly important in: (a) Export trade: Indian exporters can sell overseas through a del credere agent who vouches for foreign buyers' payment — insulating the exporter from foreign buyer credit risk. (b) Large commodity markets: Cotton, jute, and commodity trading historically used del credere agents who guaranteed payment from buyers they introduced to mills. (c) New market entry: When a seller enters a new geographic market, a del credere agent who knows the local buyers can guarantee their payment, reducing the risk of extending credit to unknown parties.
“The del credere agent is the seller’s insurance against buyer default — a specialist who knows the market well enough to vouch for buyers with their own money. This alignment of commercial knowledge and personal financial risk is the hallmark of the del credere relationship.”
This Term in Indian Statutes
Indian Contract Act, 1872, 1872
"An agent is a person employed to do any act for another, or to represent another in dealings with third persons."
Del credere agent is a special type of agent under Section 182 who also guarantees buyer's payment — combined agency and guarantee
