What are the commercial transactions and what are their types?

04 August 2020
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Trader and commercial are two interdependent concepts. Who is a trader? What is meant by commercial transactions? In this article you will learn about intrinsic commercial transactions and subordinate commercial transactions.

Trader and commercial are two interdependent concepts. There are many people call themselves traders even without any accurate understanding of this word's meaning. In today’s world, traders have an important role and expansive work area. Traders follow some particular rules in their work area. Generally, specific responsibilities and duties can be considered for them. In this article of Sindbad, we are trying to focus more on being a trader.

Who is a trader?

Who is a trader?

There are various definition of commercial and trader in international commercial books and rules, but the most complete and comprehensive is the one mentioned in the Commercial Code. According to Article 1 of the Commercial Code, a trader is somebody who takes commercial transaction as his or her normal job.

What is meant by commercial transactions?

These commercials are divided to intrinsic commercial transactions and subordinate commercial transactions. Intrinsic commercial are indeed the transactions listed in Article 2 of the Commercial Code, and if a person is engaged in these transactions, he or she is known as a trader. On the other hand subordinated commercial transactions are listed in Article 3 and are considered as commercial transaction on the merits of that one of the parties of the transaction is a trader.

For the transactions to be commercial, the purchasing must be for the intention of selling and the intention of selling should be at the time of purchase. Also, obtaining must be for the intention of selling; therefore, if movable obtaining isn’t for the intention of selling, there is no commercial. Furthermore, the property must be movable. Immovable commercial are not considered as commercial transactions since there are some rules for the firmness of immovable transactions that have lengthy formalities and are at odds with the speed of commercial transactions. They could be registration at various authorities and notary bureau.

Intrinsic commercial transactions

This kind of transaction which takes place all over the world involves specific types of operations and transactions such as:

1. Purchasing or obtaining any kind of movable property for the purpose of selling or renting whether or not there have been seizures.
2. Take the responsibility of transportation by land or water or air in any way. If somebody’s job is to take responsibility of transportation affairs, he or she is known as a trader. Transportation is a significant issue in commercial that can be done through land, sea, air and rail.
3. From any kind of brokerage and taking responsibility of any kind of institutes that are done for some affairs we can mention facilitating real state or finding a crew by providing and delivering supplies and etc.

  • The broker is a person who, in return for a salary, mediates transactions without being the buyer or seller; whether the property of the transaction are movable or immovable
  • The middleman is a person who makes transactions in his or her own name but on another account in return for a fee.  The difference between the broker and the middleman is that the broker doesn’t make transaction in his own name; he just is the mediator of the transaction and finds the party to the transaction but the middleman purchases and sells the goods in his name even if it is related to other person inwardly.  
  • The agent is the one who does things on the order of other person; whether the property belongs to himself or not

4. Taking the responsibility of auctioneer, offering goods to multiple customers and selling them at the highest price which means auction. This could be a kind of brokerage with the difference that the broker is trying to attract the customers but in auctioneer the good is put for auction in a certain place.
5. Any kind of exchange and banking operations; A money changer is someone whose job is to convert common and different cash into each other for profit by buying and selling commercial documents like Barat. A bank is an institution created by a person or persons to carry out exchange operations in a more complete and extensive manner. Basically, the main act of exchange is buying and selling commercial documents.
6. Maritime and non-marine insurance operations is a contract due to which the person compensates for certain possible damages in returns for the money that he receives. The money taken may be in one step, or in installments such as life insurance. The insurance must be for profit.

Subordinate commercial transactions

As the Intrinsic commercial transaction, the subordinate commercial transaction is taking place all over the world and involves specific types of operations and transactions such as:

Interactions between traders, businessmen, exchangers and banks

Obviously when the parties of interaction are traders, their interactions are commercial in two conditions:

  1. The transaction should not be for personal use.
  2. Transactions should not be related to immovable property. So if two people trade a real estate business, it won't be a commercial.

All transactions that a trader makes with a non-trader to meet his business needs such as construction contract with installation for Business Company or book writing (since these activities are for profit) and also all transactions of commercial companies are considered as a kind of commercial transactions.

The last word

Commercial transactions has been always the significant part of international commercial markets. Therefore, it is very important to have accurate understanding this concept. This article provides a definition of commercial transactions as well as two main types of commercial transactions. Sharing your experiences and comment will make us glad.

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