Security of Debt

  1. What is direct delivery
    • Deliveries of goods direct from Supplier to Customer ie the
    • Client does not handle the goods.
    • Otherwise known as "DROP SHIPMENTS".
  2. What is the procedure for Direct Delivery?
    • Where a right of recourse exists from Supplier direct to Customer, or where the Client is acting as AGENT, all the debts due from that
    • Customer should be reserved. The Debtor should be excluded from the Agreement for the purchase of debts at the earliest
    • opportunity.
  3. What are the concerns with Direct Delivery?
    • The Supplier is aware of the ultimate Customer and may attempt
    • to obtain payment direct in the event of default by the Client: their terms of
    • sale may even contain the right to do so.
    • Additionally, the Factor may have to rely on the goodwill of the
    • Supplier to obtain Proof of Delivery, and there is always the possibility that
    • the Supplier is involved in PRE-INVOICING or CONSTRUCTIVE DELIVERY.
    • The client may also be acting as AGENT, not PRINCIPAL.
Card Set
Security of Debt
Security Of Debt