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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 (52 & 53 Vict. c. 45),[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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