| Commentary

386 Credit risk

| Commentary

386 Credit risk

Where a distributor accepts orders from customers for items of product and fulfils the orders, then, depending on the financial provisions in the distribution agreement, the distributor may become liable to pay the company the sale price of the company for supplying the product of the distributor. Alternatively, the distributor may become liable to pay to the company the distributor's resale price, less a fee and expenses. The precise terms will depend upon the arrangements.

The liability owed by the distributor to the company will probably be absolute and the distributor may therefore protect its position, and ability,

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