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Fiduciary Duty and Contract of Agency

   

Added on  2020-02-14

11 Pages3977 Words249 Views
Legal Aspects of Business

Table of ContentsINTRODUCTION...........................................................................................................................1TASK 1 ...........................................................................................................................................1TASK 2 ...........................................................................................................................................4CONCLUSION................................................................................................................................7REFERENCES................................................................................................................................8

INTRODUCTIONIn the present world, there are different types of laws which implied on the businessorganizations. For maintained business operation, it's important that to follow each and everylegislation imposed on the firm (Akintoye, Renukappa and Lal, 2012). The present report makeanalysis on the fiduciary duty and their impact on the contract of agency. Agency can be describeas the actions which taken by an individual as per the order of another person. In addition, italso makes analysis on the Vicarious liability and its different aspects. TASK 1 Fiduciary duties owed by an agent to the principal.Fiduciary duty As according to the English law, fiduciary duty is legal relationship in between two ofmore than two parties. It is considered as the highest standard of care. The person who hasfiduciary duty is called the fiduciary and the person who owns the duty is called as the principalor beneficiary. It is the highest standard of care imposed at either equity or law (Bowyer, 2016).A fiduciary is expected to be extremely loyal to the person they own the duty. The person whois performing duty, must not put their personal interest before the duty and must not involvedunethical profit practices by using their position. Basic elements of this relationship are goodfaith, loyalty and trust. When the fiduciary duty is imposed, it is requires to maintained level of equity and dutyof care. In the case of equitable cause of action for the fiduciary obligation required proof of thetwo element i.e. there was relationship in between fiduciary and beneficiary , and another one isobligations are part of that contract. Nature of Agency relationshipAs per the English law “ Consensual relationship authorizing on party to act on the behalfof another party”. As per this law employment it is duty which is given by one person toanother person and bringsboth of them into legal relation (Dimatteo, 2016). This relation may becreated by the express appointment or by implication of law or by subsequent ratification by theprincipal. As per the fiduciary aspects of the agency, equity must be derived from equity, quasicontract or tort. In the case of agency fiduciary duties are specific type of the contractual term,namely duty of unselfishness, which applies in the absence of contrary agreement. 1

In the case of the Agent and Principal relationship, it is duty of the agent to follow eachand every rules. (Gillies, 2014). This relationship is based upon trust and loyalty. It is the dutyof the agent to avoid personal interest and maintained duty of delegation of authority.Following are the basic duty of the fiduciary contract are as follows. Conflict between duty and interestThe nature of the agency relationship is based on trust, that agent must be maintained. Itis duty of the agent to avoid of interest which appears during performing his duty. Agent musthave known that no personal interest should come under this relationship, otherwise it canconsider as part of the breach of contract agency (Oladokun and Aluko, 2014). This situation isclearly defied in the case of Consul development Pvt Ltd V DPS Estates Pvt Ltd.As according tothe case law, Grey as managing director of Walton’s company . The another company DPS hasgive him task to make investigation and find the suitable properties for development of theirbusiness. Under this contract Grey Owed fiduciary duty of DPC (Oladokun and Aluko, 2014).As per this law Grey, worked as agent and need to maintained that his personal interest wouldnot come under this contract. Later, Grey break this contract and purchased some properties forhimself which DPS might have wished to purchase which is considered as conflict of interest. Duty not to accept any kind of commission or bribeIf at the time of performing the Job, any type of commission or bribe consume by theagent then it is considered as the breach of duty and agent has to get punishment. It is the duty ofthe agent if any kind of illegal commission which is derived during the performing of the duty,and exceed amount of remuneration then exceeding amount will be seized by principal (Koutsiasand Willett, 2012). Along with this some legal actions may be taken against him/her. Similarcondition was also appeared in the case of Reading v R. In this case R was sergeant of theBritish army, in the year of 1943 and 1944, he was on the active service in the Egypt. During hisservices he was involved with many types of smugglers. He got money from the smugglers toride in their lorriesof illegal spirit, he got more than £20000 each time, but was caught. The stateseized money and give him punishment to live in prison (McInnes, Kerr and VanDuzer, 2013).In this case Mr Reading hold fiduciary duty. So he was liable to maintained nature of agency inthis case. Make own profit without consent to the principal2

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