1-       INTRODUCTION

1.1     Meaning of Selling Locally

The term sale has only one meaning in Jordanian Law. It is defined by Article (465) of the Civil Code as a contract by which a person transfers to another the property of a thing or any other financial right for consideration. This definition is wide and contains some other contract, although none of them are regarded as sale according to the code itself. An example of this may be found in lease and barter contracts(1) where each is and exchange of a financial right for consideration, but is not a sale in the strict legal sense. In reviewing the meanings given in the code to other contracts, one may say that a contract of sale is agreement by which a seller transfers the property of a thing for money consideration.

It is necessary to distinguish between a contract of sale and a promise to sell, which means an agreement to enter into a contract of sale in the future. The latter is a mere promise, not a final sale. In order to be valid, such a promise must contain at least two provisions(2):

1.       The essential elements of the final sale, which are the subject matter of the sale, i.e., the thing to be sold, and the price.

2.       The time the contract of sale shall be concluded, such as one month or seven days.

In addition, if the intended sale is formed, a promise to sell must comply with such formality(3). Generally speaking, every contract under Jordanian law, including a contract of sale, is made by a mere consent of the contracting parties without any formality whatsoever(4). In exceptional cases, the law may require a specified formality, without which a contract is void(5), such as the sale of a car where its registration at the Traffic Department is essential(6). In that case, the promise also is void unless it complies with the formality so required.

A sale of goods can be made directly by the owner, which is common is practice, or through an intermediary who may be an agent or distributor. The difference between them will be explained below. Suffice to say here that although a foreign supplier may use either of these two intermediaries for selling his goods, it is important to note that it is strictly prohibited for a foreigner to deal with business in Jordan where such business is confined to importing and selling goods in the country(7). This applies to traveling salespersons who are employees of a foreign supplier, and to local branches and subsidiaries of that supplier. In short, selling goods in Jordan may take place by Jordanians only.

1.2     Agents and Distributors

The Jordanian Commercial Code makes a distinction between civil and commercial agents. Where the object or subject matter of an agency (wakalah) contract is a commercial matter, the agency is commercial (tijari), otherwise it is civil(8) (madani). The commercial matters include, inter alia, the purchasing of goods for the purpose of selling them with the intent of obtaining profits, and the selling of such goods regardless of whether the seller has achieved profits(9). In particular, an agency shall be commercial when it is for a commission (umoula), the agent acts in his own name or under a commercial title, i.e., a commercial artificial name, and for the account of the principal. If an agent acts in his principal's name and for his account, the agency is civil. While the agency in the former case is subject to the commercial law, the latter is governed by the civil law(10).

According to the Commercial Agents and Intermediaries Act No. 44/985, (hereinafter referred to as the Act), a commercial agency includes a distributor (muwazz'a) who deals either for his own account or the account of a foreign company of a merchant whose head office is outside Jordan(11). where the distributor acts for the account of a foreign company by way of commission, he is governed by the rules applicable to the commission agent. Again, it should be noted that a commercial agent in all cases must act in his own name.

There are other groups, which include brokers and dealers, who are known as commercial intermediaries. The function of an intermediary (waseet or simsar) is to facilitate business by reconciling two different views until the parties concerned reach an agreement(12). For instance, a may wish to sell his goods for JD 10 while B wants to by them for JD 7. As an intermediary, C interferes, and as a result, A and B conclude the contract of sale between them for JD 9. In such capacity, C is not an agent, though the agency rules generally apply to the agreement he has already made with A, B, or both. His remuneration is to be determined in accordance with that agreement or, if the agreement is silent, according to the custom. Otherwise, the court shall determine it depending on all surrounding circumstances(13). It is important to note that C has no claim for the remuneration unless he has registered his name as an intermediary in the Register of Agents kept by the Register at the Ministry of Industry and Trade in Jordan(14) (hereinafter referred to as the Ministry). 

Another type of intermediary  may be called a messenger (rassoul). His only function is to transfer a message, exactly as it is, from one person to another. While an agent, when concluding the agreement expresses his own will, the messenger expresses the will of another person(15). Indeed, a messenger is not more than a message courier although he may be called an agent. This type of intermediary may exist in all transactions, including commercial sales.

Franchising, or the permission  to use a trademark for certain services by the franchisor to the franchisee, may be regarded as an agency depending on the real interpretation of the contract. As was mentioned, a person is an agent in each case where he acts for another person or where he is a distributor acting for his own account. If a franchising contract bears either of these tow meanings, it is an agency. Other wise, it is an unnominated contact(16) and shall be governed by the general principles applied to every contract(17) and to the rules applied to that specific contract to which the franchising is more closely related.