Factors

Compensation is a contractual right, and, subject to the terms and conditions of the agreement, commissions are paid when a sale is made. When an express agreement or statute does not fix the amount of compensation, the factor is entitled to the just and reasonable remuneration customarily charged for these services. In the absence of a customary rate, the factor has a right to receive a fee that is fair and reasonable. Acts of fraud, misconduct, gross negligence, and breach of contract would cause the factor to forfeit the right to compensation.

The advancement of money due for the cost of freight depends on the contract or course of dealing between the factor and principal. When a factor advances funds in connection with the goods in his care and is not reimbursed by the principal, the factor has a right to sell the goods in order to satisfy the expenditures. Any excess must be returned to the principal. The factor is entitled to interest on any advances but forfeits the right to reimbursement and interest if his NEGLIGENCE, fraud, or misconduct results in a loss for the principal.