...whereby a person is bound by the principal to act, represent or speak for him in front of the third party and make decisions on behalf of the principal. A principal may hire an agent who will act as a principal and will be solely responsible for the decision he makes on the name of the principal (Mckendrick 2012,p. 5). There are three types of authority but an agency made with an agreement is an implied authority. Contract of agency can be helpful for big business official as they cannot be available anywhere, anytime. The relationship with an agency can be terminated if the parties feel that the relationship is not going in a beneficial manner. There are various factors which can influence and terminate contract of agency it depends on the legal contract and various clauses they have signed during the agreement. According to Scottish law if the contract which has been set up for indefinite time the notice for termination of agency to be given for first year should be 1 month for second year two months and for third year 3 months prior before the termination by any of agent or the principal. There are different ways in which contract of agency can be terminated 1)Act of parties 2)Operation of law 3)By agreement. Under act of parties there can be few scenario's one is revocation by principal in which the principal no longer wants the agent to work or act for his business or premises this situation can be handled by giving a notice to an agent and the notice should also be presented...
Words: 1202 - Pages: 5
...Law of agency From Wikipedia, the free encyclopedia Jump to: navigation, search The law of agency is an area of commercial law dealing with a contractual or quasi-contractual, or non-contractual set of relationships when a person, called the agent, is authorized to act on behalf of another (called the principal) to create a legal relationship with a third party.[1] Succinctly, it may be referred to as the relationship between a principal and an agent whereby the principal, expressly or impliedly, authorizes the agent to work under his control and on his behalf. The agent is, thus, required to negotiate on behalf of the principal or bring him and third parties into contractual relationship. This branch of law separates and regulates the relationships between: • Agents and principals; • Agents and the third parties with whom they deal on their principals' behalf; and • Principals and the third parties when the agents purport to deal on their behalf. The common law principle in operation is usually represented in the Latin phrase, qui facit per alium, facit per se, i.e. the one who acts through another, acts in his or her own interests and it is a parallel concept to vicarious liability and strict liability in which one person is held liable in criminal law or tort for the acts or omissions of another. In India, section 182 of the Contract Act 1872 defines Agent as “a person employed to do any act for another or to represent another in dealings with third persons”...
Words: 4577 - Pages: 19
...Agents play a vital role in commercial activity. Many commercial transactions in the field of commerce are conducted through agents who act as intermediaries and represent the interests of their principals in the conduct of the principals business. Auctioneers, estate agents, commercial agents,commission agents, mercantile agents, brokers, factors, solicitors and barristers are just a few of the many people described as agents who may act on people behalf in the ordinary course of life. The essential point to be borne in mind is that the relationship between agent and principal is essentially a binding contractual one which imposes upon both parties' rights, duties and obligations. Agents “are to be found in all advanced societies and… [Their] activities are an inevitable feature of a developed economy”. In addition, it may be useful at the beginning of any discussion of agency to attempt a definition of the common factor which brings them all into the category “agent” or, indeed, it may be useful to ask whether they all properly called agents. The courts have only very rarely attempted to define the agency relationship though they have an occasion pronounced on what agency was not. In the recent case of Comet Group plc v British Sky Broadcasting the court held that promotional contracts to be quite distinct from agency. Fridman (1996) stresses that the effect of someone being an agent is that he affects the legal rights of his principal, and he works backwards from his conclusion...
Words: 2874 - Pages: 12
...AGENCY The general law of contracts is embodied in the Contract Act, 1872. The law of agency being a branch of the law of contracts, the same is incorporated in the said Act by giving it a full chapter on the subject. Thus sections 182 to 238 of the Contract Act, 1872 deal with the subject of Agency. Special enactments are also there and where a provision of a special Act is in conflict with the provision of the general Act, the former shall prevail unless the special law itself states otherwise. The wisdom behind this principle is to maintain consistency in law and to oust any ambiguity or confusion concerning any subject. PARTIES TO THE CONTRACT OF AGENCY AGENT AND PRINCIPAL: AGENT: Agent is an individual or firm authorized to act on behalf of another (called the principal), such as by executing a transaction or selling and servicing an insurance policy. The agent does not assume any financial risk in the transaction. The function of the agent is to act on behalf of his principal in bringing about a contract between his principal and a third party. The relationship between principal and agent can arise in many ways, by contract under seal or in writing or verbal, by contract implied from the conduct or situation of the parties and by ratification. An agent such as a director has a lot of duties for the company. He must act in good faith in the interests of the company. As well, he has duty to avoid actual and potential conflicts of interest. If the agent breaches his duty...
Words: 7591 - Pages: 31
...exists between two persons where one called the agent is considered in law to represent the other called the principal in such a way as to affect the principal’s legal position in relation to other parties. This presentation will explore the below: • Definition of agency • Creation of agency • Effects of contracts made by agents • Rights and duties between principal and agent • Termination of agency DEFINITION OF AGENCY An agent is a person employed to do any act for another or to represent another in dealings with third persons. Cap 23 Laws of Kenya is the law that governs Agency law in Kenya. The law of agency is based on the common law rules developed by English courts and rulings made by other courts in the Commonwealth. On March 14th 1978, Kenya adopted the convention on the law applicable to agency. In Timmins (Town) v Brewers' Warehousing Co. Ltd (1962) Schroeder, J.A. stated, inter alia, that "the outstanding feature of an agent's employment in a legal sense is that he is employed primarily to bring about business relations between the principal and third persons, and this characteristic is perhaps the most distinctive mark of the agent as contrasted with others not agents who act in representative capacities". The law of agency prescribes the legal rules for determining- (a) How a person may become an agent; (b) The rights and duties between the agent and the principal; (c) The relations between the agent and the third party; and (d) The manner in...
Words: 2713 - Pages: 11
...BETWEEN: [PRINCIPAL NAME] (the “Principal”), a corporation organized and existing under the laws of the [STATE/PROVINCE], with its head office located at: AND: [AGENT NAME] (the “Agent”), a corporation organized and existing under the laws of the [STATE/PROVINCE], with its head office located at: NOW, THEREFORE, in consideration of the mutual agreements and covenants herein contained the parties hereto agree as follows: 1. RECITALS a. Principal is a manufacturer of [PRODUCT] and desires to appoint Agent as general sales Agent for the sale of Principal’s product [IF APPROPRIATE, ADD: AND OTHER REGULAR-LINE PRODUCTS AND ACCESSORIES OF PRINCIPAL] in the following territory: [DESCRIBE TERRITORY]. b. Agent desires to accept such appointment and to perform all the provisions of this agreement. 2. DURATION The term of the agency created shall be [PERIOD OF TIME], beginning [DATE], unless sooner terminated. 3. AGENT’S BEST EFFORTS Agent agrees to devote Agent’s whole time and best efforts to the business of Principal in the described territory under the direction of Principal’s officers or representatives, and to conform to the best of Agent’s ability with the rules, regulations and instructions of Principal now in force or that may be adopted and mailed to Agent’s address. Agent shall employ salespersons to assist Agent, on such terms and conditions as Principal may require, as set forth in this agreement. 4. NONDISCLOSURE OF PRINCIPAL’S AFFAIRS Agent agrees to...
Words: 2602 - Pages: 11
...common law arise when agents make contracts on behalf of principals. Should a principal be bound when his agent makes a contract on his behalf that he would immediately wish to disavow? The tradeoffs resemble those in tort, so the least-cost avoider principle is useful for deciding which agreements are binding and can unify a number of different doctrines in agency law. In particular, an efficiency explanation can be found for the undisclosed-principal rule, under which the agent's agreement binds the principal even when the third party with whom the contract is made is unaware that the agent is acting as an agent. Agency deals with situations in which one person -- the principal-- uses another person -- the agent-- to act on his behalf. Sometimes the acts of the agent are attributed legally to the principal, sometimes not. Clearly, agency is central to business dealings. No owner of a business can do everything himself; he must delegate some things to agents, and this is true not only of large corporations but of sole proprietorships that have employees who work for the owner. In partnerships, the partners act as each other’s agents. And in corporations, the shareholders are completely unable to act on their own behalf; they delegate authority to a board of directors, who in turn delegate authority to the officers of the corporation. In this report we will discuss the formation and types of agencies with a detail analysis of the evident problems between principal-agent relationships...
Words: 7209 - Pages: 29
...information on how the law handles purchasing agent actions when acting upon directions from their principal, but what happens when the agent acts alone, is the agent held responsible? What about signature authority or when the agent is careless and takes on actions that he/or she has no right to perform. Can a purchasing officer be held personally responsible for actions outside the knowledge of his principle? Purchasing officers (agent) are employees who buy supplies and materials for the companies they work for. They dicker over the smallest costs and make decisions for the company on materials and supplies that would benefit the company. Agents are also in charge of managing contracts and ensuring that they are completed in time. Purchase agents have to be educated with enough knowledge to make the right decisions on handling the purchasing, inventory levels, suppliers and the economics which will enable them to make the important decisions to help a company succeed. Contracts involve negotiating for bids, being technical in your knowledge and being able to access what products are needed is part of what makes the agent the expert and their field. Purchasing agents are expected to be able to meet with vendors and to be able to iron out the problems, so as not to cause harm to the company. The control of the Agent comes from the principal. This can either be a company, or an individual who has the authority to delegate his duties to the agent for the good of the...
Words: 3276 - Pages: 14
...Bribary Offering or receiving something of value to influence a person in the performance of an official duty. 8. Rule of law:Crime: R.I.C.O Under the RICO it is a federal crime for any person to use income derived from a pattern of racketeering activity to acquire an interest in a enterprise. 9. Rule of Law: Intentional Torts: Battery A battery is the intentional and harmful or offensive touching of another without consent. 10. Rule of law: Intentional Torts: Assualt Is placing a person in immediate apprehension of one's physical safety. 11. Rule of Law:Intentional Torts: Assault/Battery Defenses o 1. Self defense is defending yourself and a third party using only enough force that is necessary. o 2. Discipline is a parent using enough force that is reasonable and necessary. 12. Rule of Law: Intentional Torts: False Imprisonment:Defense o False imprisonment is the intentional confinement of another person for an appreciable time without consent. o Defense: Consent 13. Rule of law:Intentional Torts: Defamation of Character Defamation of character is publication of a false statement about a person that brings one into hatred, ridicule or contempt. 14. Rule of Law: Intentional Torts: Defamation of Character: Defense. o 1.)The truth o 2.)Must be communicated to a third party. o 3.).Absolute Privilege like a judge during a court session. o 4.) Conditional Privilege which means that whatever is said must...
Words: 988 - Pages: 4
...contracts namely- 2 There are five implied terms under the sales of goods act 1979, they are 2 Task 2: 5 EX: 5 RIGHTS OF AGENT or DUTIES OF A PRINCIPAL :- 5 DUTIES OF AN AGENT :- 6 Advising Rosy whether she will be bound by the contract with Yasmine: 7 References:- 8 TASK 1:- A contract of sale of goods is a contract whereby the seller transfers or agrees to transfer the property in goods to the buyer for a price. There may be a contract of sale between one part-owner and another. There are two types of contracts namely- * Express contracts- In an express contract, the parties state the terms, either orally or in writing, at the time of its formation. There is a definite written or oral offer that is accepted by the offeree (i.e., the person to whom the offer is made) in a manner that explicitly demonstrates consent to its terms. * Implied contracts- Although contracts that are implied in fact and contracts implied in law are both called implied contracts, a true implied contract consists of obligations arising from a mutual agreement and intent to promise, which have not been expressed in words. It is misleading to label as an implied contract one that is implied in law because a contract implied in law lacks the requisites of a true contract. The term quasi-contract is a more accurate designation of contracts implied in law. Implied contracts are as binding as express contracts. An implied contract depends on substance for its existence; therefore...
Words: 2174 - Pages: 9
...Ratification: an agent secures a contract on behalf of the principle and the principle agrees to it. Buy custom Law of Agency: Amber and Ashgan Case Study Analysis essay The law of agency applies to both the two individuals in the case given that they possess an agent-principal type of relationship. Thus, the law of agency between the two is narrowed-down to the duties of the agent in respect to their respective principals. It should be noted Ashgan, the personal assistant, is the agent while Amber, who happens to be the employer, is her immediate Principal, The first duty of Ashgan, as an agent, is not to become the principal as against her employer’s or principal’s knowledge. This duty, on the part of the agent, is meant to prevent her from situations in which there will be possible conflict of interest between her duty as an agent and her personal interest. Notwithstanding, a breach against this course of duty renders the contract, entered into by the agent, as voidable at the desire of the true principal. For this case, the contract to purchase the limited edition, sliver Bays-water Tote handbag created the aforementioned type of conflict and thus, it was Amber to decide whether or not the contract was voidable. Second, the agent has a duty not to engage in business activities and hence making secret profits. It should be noted that secret profits is a phrase taken to mean any form of material or financial benefit that may be accrued on the part of the agent without the...
Words: 1089 - Pages: 5
...CHAPTER 1 “LEGAL FOUNDATIONS” Administrative law is the body of law that governs the activities of administrative agencies of government. Clean hands doctrine a rule of law that a person coming to court with a lawsuit or petition for a court order must be free from unfair conduct (have "clean hands" or not have done anything wrong) in regard to the subject matter of his/her claim. Common law is based on precedent (legal principles developed in earlier case law) instead of statutory laws. It is the traditional law of an area or region created by judges when deciding individual disputes or cases. Constitutional law – a body of law dealing with the distribution and exercise of government power. Criminal Law versus Civil Law – Civil * between you and another citizen (no government involved); * disagreements between citizens were no crime has been committed (only e.g. injury); * designed to compensate parties (including businesses) for losses as a result of another conduct ; * e.g. speeding and parking violations; * don’t result in loss of freedom, though they can result in loss of privileges or fines. Criminal * between you and the government/law; * are a protection of society; * Congress and House of Representatives are involved; * When the individuals break the laws/are against the government; * actions that have been declared illegal; * they are prosecuted by the state (city, state or country); * normally punished with...
Words: 6978 - Pages: 28
...| Business Changes | Buss 311 Alex Hooley | sandra chapman 11-17-2014 | There are many liabilities to owning, manufacturing, selling and using fireworks. The potential personal liabilities for injury to consumers caused by fireworks can be devastating to those involved but taking precautions and having warning labels/notices can reduce these risks. Taking on larger business sales of fireworks should include changing from a sole proprietorship to a LLC. With this transition there would also be an increase in employees or independent contractors in order to manufacture more product for the high volume of orders. Creating a valid contract is most important to have before making any of these necessary changes to a business or else there would be a devastating effect on the manufacturing party. As the manager of Acme Fireworks I have decided to choose Common Law over the Uniform Commercial Code (UCC) because if any changes are made it will lead to the rejection of the initial offer rather than not having much of an impact like the UCC law would by treating it the same. The contract in Common Law would have to be modified with additional consideration in order to make any changes where the UCC it would not impact the original offer and if signed in writing it would not revoke that contract. The UCC is more interested in quantity and Common Law is interested in quality and quantity as well as the price and nature of the work. It is important in the fireworks business...
Words: 2028 - Pages: 9
...INSURANCE SERVICES AGENCY APPROACH In recent times the insurance business has been based on agency representation and relationship. The agent represents the principal in the sale of insurance policies and in forcing a contractual relationship between the principal and the client. According to Nwachukwu (1991), the following criteria will be considered in agency creation 1) The creation of agency. The relationship can be formulated either through written or oral communication or by conduct. When required to act under seal, the agent must be given a document to validate his authority. This gives the agent power of attorney to act on behalf of his client. It has also been 2) Capacity: only individual who have been proven capable can act as agents. Exceptional cases are made during his period of sanity. Also a company can take up the role of an agent for another party, even if its not in line with the business operation of the company. The relationship that exists between the principals and agents is solely based on the resultant benefits. Classification of the Power and Authority of the agent 1) Express Authority: in this situation, the authority and rules governing the relationship is clearly spelt out in writing, oral or by deed. The oral form might not cure handy when issues come up. Where the written authority might not be specific and this gives room for manipulation of the principal by the agent. 2) Implied Authority: this authority is based on the nature...
Words: 1713 - Pages: 7
...Business Law I MGMT235-1401A-05 January 15, 2014 For this discussion board post we are to discuss the topics of Agency Law and the different principals and ideas that go along with it. There are three types of principles that exist; they are disclosed, undisclosed, and partially disclosed principals. A disclosed principle refers to when there is a 3rd party involved. The person/people are not hidden by the company to the person or persons that they are working with. For example, Let’s say you have a bill and you have not paid it, the company that you had the bill will originally may turn your account over to another collection agency and they would in turn contact you and let you know that your account has been turned over to their company to collect the debt on behalf of the original company. When it comes to an undisclosed principle, it’s just that, not disclosed, no information is given on that agent. They still are working either on their own behalf or through a company and do not want their information public. For example, if I was under an undisclosed principle I would not go into a meeting and say, “I am here on behalf of Yellowstone National Park”. This information would not be given out. For a partially disclosed principle, at the time of the deal, the person may know that the other person he is dealing with is portraying themselves as an Agent but does not know who the main source or principal is. For example, if I am speaking on behalf of a national park...
Words: 598 - Pages: 3
