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What Are Commercial Transactions?

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  • Written By: Helen Akers
  • Edited By: O. Wallace
  • Last Modified Date: 21 June 2014
  • Copyright Protected:
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    Conjecture Corporation
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Commercial transactions are exchanges that involve some sort of payment for a good or service. These types of transactions are usually governed by commercial law and must follow specific guidelines. There are many forms of business transactions, including those that occur between two separate businesses, consumers and businesses, between internal divisions of a company and between two individual consumers.

Exchanges of money for a product or professional service are usually classified as commercial transactions. Some of the more obvious exchanges of this nature include a consumer purchasing goods in a retail store and a manufacturer selling its products to wholesale companies. Commercial transactions can occur in a physical store location, online, or through direct interaction with a sales representative or direct seller. The exchange of money may happen at the time the goods or services are delivered, beforehand or after the fact.

Commercial trade can happen on a large or small scale. Much of the global economy is dependent upon the level of commercial transactions or activities. Suppliers sell raw materials and goods to other companies that may re-sell them or use the supplies in their manufacturing processes. Goods are marketed and sold to consumers who may use them for personal or business use. At some point these goods may be re-sold in private auctions or to second hand retailers.

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Transactions may be visible or occur behind the scenes. While store transactions are able to be observed by any casual consumer and business personnel, commercial transactions that happen between two private individuals or through direct channels may not be so noticeable. Manufacturers' sales representatives may draw up purchasing contracts, make presentations, deliver and merchandise products that are eventually purchased by end consumers. In addition, there are many direct and multi-level marketing companies that sell to consumers directly without the use of a retailer or wholesaler.

Commercial activity can also include activities such as corporate advertising and internal relationships between corporations and service providers, such as human resources and accounting vendors. Regardless of the type of commercial transaction, there are usually laws that govern what can and cannot occur. This legislation is often referred to as commercial law. For example, consumers usually have three days after a purchase commitment is made on certain goods to change their minds without any financial implications.

Additional examples of commercial law include the representation of products in advertising. In some countries, statements, slogans and claims are not allowed to be misleading or imply a promise that the product is not able to live up to. An example of this would be a popular mouthwash brand that was forced to correct its advertising after making claims that the product could prevent the cold virus from developing and spreading.

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