Exporting Houses

A device to finance international trade, we have all tended to visualize the seller in one country and the buyer in another. One other method involves ‘Confirming Houses’ or, to use their more modern title ‘Exporting Houses’. This method of trading tended to evolve in those European countries (e.g. UK, Holland, Portugal, etc) which administered substantial overseas territories in the first half of the century. They are now to be found in almost all industrialized countries. Their role is an unusual mixture of agent and principal. The purchase negotiations may take place directly between the overseas buyer and the seller or the buyer may choose to have the confirming house locate and order the goods as the buyer’s agent. When the time comes for shipment, the confirming house earns its title because it ‘confirms’ responsibility for payment to the seller as and when supplies are shipped. In some contracts the confirming house’s commitment goes even further by accepting full liability as a principal vis a vis the seller while still being seen as an agent by the buyer. Regardless of the contract terms relating to the sale, the confirming house will always be a principal in its dealings with the carrier.