Two common types of arrangements between contracting parties can create excessive financial risk for a party. The first is a company serving as a middleman or payment agent by accepting funds from a customer and then disbursing funds received to pay for goods or services that benefit the customer, not the agent. Examples include ad agencies accepting customer funds and paying for ad creation and placement, and logistics companies paying freight bills of their customers from customer funds.
The doomsday scenario is as follows. Big Retail Co. incurred $3 million of shipping bills over a 90-day period. Freight Agent Co. received funds from Big Retail to pay the shipping bills, but the funds were not paid timely to Freight Agent and then Big Retail filed bankruptcy at the end of the 90-day period.
Please see full article below for more information.
Firefox recommends the PDF Plugin for Mac OS X for viewing PDF documents in your browser.
We can also show you Legal Updates using the Google Viewer; however, you will need to be logged into Google Docs to view them.
Please choose one of the above to proceed!
LOADING PDF: If there are any problems, click here to download the file.