Intermediary

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An intermediary, also known as a middleman or go-between, is defined differently by context. In law or diplomacy, an intermediary is a third party who offers intermediation services between two parties. In trade or barter, an intermediary acts as a conduit for goods or services offered by a supplier to a consumer, which may include wholesalers, resellers, brokers, and various other services.

Contents

Diplomacy

In diplomacy and international relations, an intermediary may convey messages between principals in a dispute, allowing the avoidance of direct principal-to-principal contact. [1] Where the two parties are geographically distant, the process may be termed shuttle diplomacy. Where parties do not want formal diplomatic relations, an intermediary state may serve as a protecting power facilitating diplomacy without diplomatic recognition.[ citation needed ] In law enforcement in Mexico, the concept of intermediary has emerged with the Autodefensas, a self-governing protective association of citizens, which brokers in the struggles of the state with violent, criminal organizations known as cartels. [2]

Law

In law, the job of an intermediary involves conveying messages between principals in a dispute, preventing direct contact and potential escalation of the issue. In law, intermediaries can facilitate communication between a vulnerable witness, defendant and court personnel to acquire valuable evidence. Intermediaries can facilitate communication between a vulnerable witness or defendant and court personnel to acquire valuable evidence and to ensure all parties have a fair trial.[ citation needed ]

Trade

In trade, an intermediary middleman or commercial agent acts as a conduit for goods or services offered by a supplier to a consumer. Typically the intermediary offers some added value to the transaction which may not be possible by direct trading. Examples of intermediaries are wholesalers and resellers.[ citation needed ]

Common usage includes the insurance and financial services industries where e.g. mortgage brokers, insurance brokers, and financial advisers offer intermediation services in the supply of financial products such as mortgage loans, insurance, and investment products. In relation to energy supplies, third party intermediaries provide energy-related advice, assistance in purchasing energy and management of energy needs. [3] In a wider sense, an intermediary can be a person or organization who or which facilitates a contract between two other parties. The interests of commercial agents are protected by legislation such as the EU's Directive 86/653/EEC of 18 December 1986 on the coordination of the laws of the Member States relating to self-employed commercial agents, as implemented within each EU member state. This directive specifically notes that a "commercial agent" is an "intermediary" with continuing authority to negotiate on behalf of another person. [4] Regulations implementing the directive cover the rights and duties of the principal and the commercial agent, the agent's remuneration, and both parties' continuing obligations after the termination of the contract between them. [5] UK law specifies that neither principals nor agents may derogate from their duties as set out in the regulations. [6]

The internet is creating opportunities to automate the role of an intermediary in many industries. [7]

Trading intermediaries can be classified as merchant intermediaries or as accountant intermediaries. Bailey and Bakos (1997) analyzed a number of case studies and identified four roles of electronic intermediaries including information aggregating, providing trust, facilitating and matching. [8] [9]

In barter, the intermediary is a person or group who stores valuables in trade until they are needed, parties to the barter or others have space available to take delivery of them and store them, or until other conditions are met.

See also

Related Research Articles

Commerce is the organized system of activities, functions, procedures and institutions that directly or indirectly contribute to the smooth, unhindered large-scale distribution and transfer of goods and services at the right time, place, quantity, quality and price through various channels among the original producers and the final consumers within local, regional, national or international economies. The diversity in the distribution of natural resources, differences of human needs and wants, and division of labour along with comparative advantage are the principal factors that give rise to commercial exchanges.

<span class="mw-page-title-main">Security (finance)</span> Tradable financial asset

A security is a tradable financial asset. The term commonly refers to any form of financial instrument, but its legal definition varies by jurisdiction. In some countries and languages people commonly use the term "security" to refer to any form of financial instrument, even though the underlying legal and regulatory regime may not have such a broad definition. In some jurisdictions the term specifically excludes financial instruments other than equity and fixed income instruments. In some jurisdictions it includes some instruments that are close to equities and fixed income, e.g., equity warrants.

<span class="mw-page-title-main">Financial institution</span> Institution that provides financial services for its clients or members

A financial institution, sometimes called a banking institution, is a business entity that provides service as an intermediary for different types of financial monetary transactions. Broadly speaking, there are three major types of financial institution:

  1. Depository institution – deposit-taking institution that accepts and manages deposits and makes loans, including bank, building society, credit union, trust company, and mortgage broker;
  2. Contractual institution – insurance company and pension fund
  3. Investment institution – investment bank, underwriter, and other different types of financial entities managing investments.
<span class="mw-page-title-main">Distribution (marketing)</span> Making products available to customers

Distribution is the process of making a product or service available for the consumer or business user who needs it, and a distributor is a business involved in the distribution stage of the value chain. Distribution can be done directly by the producer or service provider or by using indirect channels with distributors or intermediaries. Distribution is one of the four elements of the marketing mix: the other three elements being product, pricing, and promotion.

<span class="mw-page-title-main">Disintermediation</span> Eliminating middlemen from a supply chain

Disintermediation is the removal of intermediaries in economics from a supply chain, or "cutting out the middlemen" in connection with a transaction or a series of transactions. Instead of going through traditional distribution channels, which had some type of intermediary, companies may now deal with customers directly, for example via the Internet.

<span class="mw-page-title-main">Broker</span> Person who arranges transactions between a buyer and a seller for a commission

A broker is a person or entity that arranges transactions between a buyer and a seller. This may be done for a commission when the deal is executed. A broker who also acts as a seller or as a buyer becomes a principal party to the deal. Neither role should be confused with that of an agent—one who acts on behalf of a principal party in a deal.

The law of agency is an area of commercial law dealing with a set of contractual, quasi-contractual and non-contractual fiduciary relationships that involve a person, called the agent, who is authorized to act on behalf of another to create legal relations with a third party. It may be referred to as the equal relationship between a principal and an agent whereby the principal, expressly or implicitly, authorizes the agent to work under their control and on their behalf. The agent is, thus, required to negotiate on behalf of the principal or bring them and third parties into contractual relationship. This branch of law separates and regulates the relationships between:

A financial intermediary is an institution or individual that serves as a "middleman" among diverse parties in order to facilitate financial transactions. Common types include commercial banks, investment banks, stockbrokers, insurance and pension funds, pooled investment funds, leasing companies, and stock exchanges.

A financial system is a system that allows the exchange of funds between financial market participants such as lenders, investors, and borrowers. Financial systems operate at national and global levels. Financial institutions consist of complex, closely related services, markets, and institutions intended to provide an efficient and regular linkage between investors and borrowers.

<span class="mw-page-title-main">Business broker</span>

Business brokers, also called business transfer agents, or intermediaries, assist buyers and sellers of privately held businesses in the buying and selling process. They typically estimate the value of the business; advertise it for sale with or without disclosing its identity; handle the initial potential buyer interviews, discussions, and negotiations with prospective buyers; facilitate the progress of the due diligence investigation and generally assist with the business sale.

An insurance broker is an intermediary who sells, solicits, or negotiates insurance on behalf of a client for compensation. An insurance broker is distinct from an insurance agent in that a broker typically acts on behalf of a client by negotiating with multiple insurers, while an agent represents one or more specific insurers under a contract.

<span class="mw-page-title-main">Markets in Financial Instruments Directive 2014</span> European Union law

Markets in Financial Instruments Directive 2014, is a directive of the European Union (EU). Together with Regulation No 600/2014 it provides a legal framework for securities markets, investment intermediaries, in addition to trading venues. The directive provides harmonised regulation for investment services of the member states of the European Economic Area — the EU member states plus Iceland, Norway and Liechtenstein. Its main objectives are to increase competition and investor protection, as well as level the playing field for market participants in investment services. It repeals Directive 2004/39/EC.

Middle man or Middleman or The Middle Men may refer to:

A freight forwarder or forwarding agent is a person or a company who co-ordinates and organizes the movement of shipments on behalf of a shipper by liaising with carriers. The carriers may use a variety of shipping modes, including ships, airplanes, trucks, and railroads, and often use multiple modes for a single shipment. A freight forwarder does not move the goods but acts as an agent in the logistics network and will carry out freight consolidation, rate negotiations, shipment tracking, customs and other documentation, among other tasks. FIATA describes a freight forwarder as the "architect of transport".

A marketing channel consists of the people, organizations, and activities necessary to transfer the ownership of goods from the point of production to the point of consumption. It is the way products get to the end-user, the consumer; and is also known as a distribution channel. A marketing channel is a useful tool for management, and is crucial to creating an effective and well-planned marketing strategy.

Agency in English law is the component of UK commercial law that deals with the application of agency law in the United Kingdom, and forms a core set of rules necessary for the smooth functioning of business.

<span class="mw-page-title-main">Financial Services and Markets Authority (Belgium)</span> Regulatory agency

The Financial Services and Markets Authority (FSMA) is the financial regulatory agency in Belgium.

Energy brokers assist clients in procuring electric or natural gas from energy wholesalers/suppliers. Since electricity and natural gas are commodities, prices change daily with the market. It is challenging for most businesses without energy managers to obtain price comparisons from a variety of suppliers since prices must be compared on exactly the same day. In addition, the terms of the particular contract offered by the supplier influences the price that is quoted. An energy broker can provide a valuable service if they work with a large number of suppliers and can actually compile the sundry prices from suppliers. An important aspect of this consulting role is to assure that the client understands the differences between the contract offers. Under some State Laws they use the term "Suppliers" to refer to energy suppliers, brokers, and aggregators, however there are very important differences between them all.

<span class="mw-page-title-main">European company law</span> Part of European Union law

European company law is the part of European Union law which concerns the formation, operation and insolvency of companies in the European Union. The EU creates minimum standards for companies throughout the EU, and has its own corporate forms. All member states continue to operate separate companies acts, which are amended from time to time to comply with EU Directives and Regulations. There is, however, also the option of businesses to incorporate as a Societas Europaea (SE), which allows a company to operate across all member states.

References

  1. ↑ "Intermediary" defined at the Cambridge Business English Dictionary.
  2. ↑ Le Cour Grandmaison, Romain. “Becoming a Violent Broker: Cartels, Autodefensas, and the State in Michoacán, Mexico.” European Review of Latin American and Caribbean Studies / Revista Europea de Estudios Latinoamericanos y Del Caribe, no. 112, 2021, pp. 137–58. JSTOR website Retrieved 4 Feb. 2025.
  3. ↑ Ofgem, Third Party Intermediaries: what your small business needs to know, published May 2015, accessed 25 January 2021
  4. ↑ EUR-Lex, Council Directive 86/653/EEC of 18 December 1986 on the coordination of the laws of the Member States relating to self-employed commercial agents, Article 1, accessed on 21 December 2024
  5. ↑ Fox Williams (2020), The Commercial Agents RegulationsюЖеР, accessed on 8 January 2025
  6. ↑ UK Legislation, The Commercial Agents (Council Directive) Regulations 1993: Regulation 5(1), accessed on 10 January 2025
  7. ↑ "The Best Online Sites for Bartering". HowStuffWorks. 2011-12-06. Retrieved 2020-01-21.
  8. ↑ Bailey, J. P., & Bakos, J. Y. (1997). An Exploratory Study of the Emerging Role of Electronic Intermediaries, International Journal of Electronic Commerce, 1(3), pp.7-20.
  9. ↑ BaileyBakos99.pdf Archived 2015-09-24 at the Wayback Machine (Spring 2000) from University of California, Berkeley
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