Legal Aspect of Business: Duties of an Agent in Agency Law

LEGAL ASPECT OF BUSINESS

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
MAIN BODY..................................................................................................................................2
The duty of care and skill............................................................................................................2
The duty to follow the lawful and reasonable instructions of the principal................................2
The duty to avoid conflict of interest...........................................................................................3
The duty to account.....................................................................................................................4
The duty not to delegate authority...............................................................................................4
Duty not to accept the bribe or secret profit................................................................................5
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................7

INTRODUCTION
Define an Agency
Agency can be defined as a kind of relationship that exist when one person or a party
engages another agent in order to act for him (Renmans, Paul and Dujardin, 2016). An agent is a
kind of subject who is imposed number of duties generals’ law as legal incidents of agency
relationship. In other words, Agency law deals with agent- principal relationship in which one
party has legal authority to act in place of another. These kinds of relationship are commonly
associated with agency law that include employee- employer, guardian- ward etc.
Ways in which Agencies are created
Agencies are created by expressing appointment, when principal appoints an agent by
expressing an agreement with the agent. In order to explain creation of agencies a case law will
be referred related to an agency law.
The Tripartite relationship (P, A and TP)
Tripartite relationship is a kind of relationship between three persons, agent, principal and
a third party. This relationship can be created between anyone. In this relationship principals
hires an agent so that they can act on behalf of the principal in order to deal with the third party.
Here a case law of insurance company has been chosen where insurer has hired a layer to do
defend a claim against its policyholder (van Tulder and van Mil, 2019). Here creation of
agencies will be explained with the help of creation of Tripartite relationship. This Tripartite
relationship can be explained with the help of UK insurance company case law in which
relationship between lawyer, the insurer, and the policyholder can be explained as Tripartite
relationship.
Characteristics of the agent/ principal relationship
Agent is legally authorized to act on the behalf of another party in business transaction
whereas Principal is a party who gives all kinds of legal authority to the agent so that they can
act on their behalf within the business transactions. In the above Tripartite relationship
between lawyer, the insurer, and the policyholder; insurer hires a defence lawyer who can act on
his behalf such that the lawyer can defend a suit against the policyholder. In order to act on
behalf of principal it is important for the agent to understand their duties they need to follow.
Relevance of agencies to modern data business
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