Mercantile agent

An agent (essentially a debt collector) who in the ordinary course of his/her business has the authority to sell, pledge, or otherwise dispose of goods; to receive payment for them and issue receipts; to sue on a contract for the sale of the goods in his/her own name; and to exercise a lien for outstanding expenses and commission over the goods in his/her possession.

In NSW, the regulation of mercantile agents is covered by the Factors (Mercantile Agents) Act 1923 No 2. The intent of this is to protect debtors from unscrupulous debt collector tactics.

  • Section 5(1) of the Act stipulates that where a mercantile agent is entrusted with the possession or title to goods, any sale made shall be as valid as if the agent were expressly authorised to sell.
  • Section 6(1) states that a mercantile agent in possession or title to goods shall be deemed to have been entrusted with them as such agent until the contrary is shown.

In Victoria, there has been significant deregulation in this area, and a ‘negative licensing’ system is in place. This means that those who do not fall under a pre-determined list of prohibited individuals/corporations can act as a mercantile agent without specific prior authorisation. The relevant legislation is the Private Security Act (Vic) 2004.