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Improve your knowledge of trade practices by learning the key facts and core reasoning behind precedent-setting reparation decisions issued under the Perishable Agriculture Commodities Act (PACA).
TOPIC: AGENCY AND THE SCOPE OF SALESPERSON RESPONSIBILITIES
Complaint: PACA Case #R-09-046
L & M Companies, Inc.
(Raleigh, NC)
v.
Panama Banana Distribution Company
(Chicago, IL)
Order: $12,716.54 award issued
L & M Companies, Inc. (L & M) alleged that Panama Banana Distribution Company (Panama) was liable for $61,650.49 in connection with 14 loads of grapes. L & M claimed the loads in question were ordered by Panama, under the terms either “open,” “PAS (price after sale),” or “f.o.b. (free-on-board).”
Panama claimed it did not order the produce involved and that L & M’s salesperson contacted Panama to handle several “troubled” or “distressed” loads. Panama claimed there was no set price on the produce and the loads were handled on consignment, with the understanding that Panama would keep 15 percent of all sales. Panama further claimed that after the loads were accepted and sold, accounts of sale were provided, and L & M and Panama settled on prices for all of the loads.
L & M did not unequivocally deny that its salesperson agreed to settle these transactions; rather, L & M argued that the salesperson did not have authority to do so, and did not obtain the necessary approval from supervisors to make the settlements effective. According to Section 16 of the Act (7 U.S.C. § 499p), PACA explained the “act, omission, or failure of any agent, officer, or other person acting for or employed by any commission merchant, dealer, or broker, within the scope of his employment or office, shall in every case be deemed the act, omission, or failure of such commission merchant, dealer, or broker as that of such agent, officer, or other person.”
Accordingly, PACA dismissed the complaint and awarded Panama $12,716.54 in attorney’s fees and expenses.
These summaries are not issued by the USDA, nor the PACA Branch, and should not be mistaken for an official government statement or release.
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