Legal Aspects of Business

This document discusses the legal aspects of business, focusing on the relationship between agents and principals. It covers topics such as authority, liability, and the duty not to delegate authority. Several case studies are also provided to illustrate these concepts.

Legal Aspects of
Business

Authority is defined as a right or power to perform an act which is legal. Business
organisation is defined as an entity who perform their operations in a corporate world by
conducting transactions related to non monetary and monetary transactions. These will ensure
effective accomplishment of organisational goals as well as activities in a well defined manner
without any issues or hurdles (Gibbs, 2016). In this, as to manage important and essential
aspects of business owner appoints an agent who hold the responsibility to represent entity along
with principal among third party. Further this has been evaluated that stakeholders acts as one of
the most important and significant aspect for an organisation despite of their size and scope that
makes company to fulfil their expectations in a well defined an effective manner. In this agent
perform the role to acts as a bridge or medium to formulate communication among stakeholder
and entity. This is beneficial for the point of view of both parties.
Further it has been identified that, agency relationship is mainly developed among two
parties in which one party is termed as principal and other is known as agent. In addition to this,it
is basically identified as a fiduciary relationship which is mainly based upon the trust factor and
it must be ensured that any type of fraudulent shout be avoid (Garvin and Beloof, 2015). In this,
principal hold the authority to exercise control over agent and further provide instructions to
them as to conduct activities. In this law of agency defined that, it is essential to have formative
legal relationship among agents and principal. Further it has been identified that agency is
mainly formed by an agreement in which principal provide authority to agent as to act on the
behalf of principal. In addition to this, it has been evaluated that validity of this agreement only
retain for certain duration of time. Apart from this, it has been determined that particular form of
factors pertain in relationship in which it is essential to have some sort of authority along with
contractual form of obligation that are required to be entered into by third party with principal.
Furthermore, if it is talked about agency concept if an agent duly acts within scope then it
becomes important for principal to be liable for the related form of consequences. Apart from
this, this has been determined that in accordance with the concept of agency principal have
liability to pay required and necessary compensation or accomplish particular action sought by
third party. But if an agent any act beyond the authority set principal free from any legal
liabilities.
This has been identified that, numerous form of authority can be offered to an agent as to
allow them to act on the behalf of principal. In this actual authority is defined as a power that has
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either being implied or express. This can be duly made by agreement in oral or written form. As
this agreement activate liabilities and rights among principal and third party. While, implied
authority is termed as a situations when is is inferred. In addition to this, anything that are written
or spoken within ordinary business course are also involved in this.
Another is apparent form of authority, this is also known as an ostensible form of authority. This
indicates no authority at all. This is mainly get develop on the assumptions due of the presence of
authority to act on principal behalf. In this there is no authority in the form of implied or
expressed. This can further been apprehended for an instance, as in board of directors decision
can be collectively made as to appoint one member as a managing director. The selected person
also get ostensible authority. This is further get treated as real form of authority in law ayes
which get decided accordance with the judgements that get passed in last cases. This may further
depend upon the fact of each of the case law.
In addition to this, doctrine of apparent authority is mainly based upon principle of
estoppel. It states that an individual is defined as a agent in which inference can be duly made
from the code of principal or words. In this, third party is required to rely on terms and
conditions that are being offered by an agent.
Usual or incidental authority termed as particular set of situation in which a principle can
be legally get treated as a liable person for the acts made by agent that are above of authority.
Within this it is important to ensure that third party are not aware related to the existence of
principle. In addition to this, it further indicates that in case if principle duly remains unrevealed
then in this case a person cannot reject liabilities occur due to performing outside ability. Further
it has been evaluated that are are particular form of acts that are duly subsidiary to main activity.
In this principal are also liable. According to the case Watteau v. Fenwick, this has been
indicated that principal is liable to all facts of agent that are confining to agent of the character.
In addition to this, additional thing that are required to be considered in that implied or
express can be duly provided by personal acting and principal as per according to law of agency.
It is not compulsory that principal is not only authorised to offer authority. In addition to this law
states that agent could not make representation by himself. In this, it is required to be made in an
intentional manner along with this third party are required to act by relying upon it. If in any
case, if third party get to know that agent have not any legal authority and are not authorised to
make principal to bind of their act the no form of liability on principal part. However, this has
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been identified that even in absence related to the apparent authority requirement, in this one
individual may bind other individual via contract. This form of situation prevails of latter was not
allowed by his own successive in which denying statement was made related to made of contract
on his behalf.
It is essential for an agent to posses authority as to perform and conduct their act as per
the instructions that are being duly ordered by principal. As it provide them with all essential
legal protection (Jackson, 2014). Further this has been evaluated that, this can be in any types as
per according to nature of position. Apart from this basically agent get duly categorised as per
according to authority as general of special agents. An agent is mainly under apparent authority
due to employment different from an principal who are mainly bound by agent acts. While along
with this, principal does not hold any form of liability as to pay of agent acts.
This has been evaluated that, individual get doubts related to agency law as there are
different types of cases that get takes place in past as to have clear set of meaning of legal
provisions that are duly applied to agency relationship. A defendant entity conduct their business
as per according to articles of association. This duly states that contact with third party those who
are outsider can de developed. Freeman and Lockyer v Buckhurst Park Properties (Managl)
[1964],. In this parties were surveyors of Buckhurt Park Properties and architects. In addition to
this, board of director provided permission to one of their directors in which selected individual
are required to act as managing director. In this authority, individual are provided with the
instructions to Plaintiff as to conduct work on behalf of this. In this main fact in this is that
individual had never been get appointed as managing director on official basis. All of these are
duly known to member of Board of Directors. Further it ha been evaluated that judgement that
get passed by court was duly appealed by parties which was further get dismissed by Lord
Diplock. In this he staged that plaintiffs does not hold authority related to inquire about
Mr.Kapoor power ( individual treated as entity managing director). In addition to this, court held
that authority was basically apparent in which it has been stated that Mr. Kapoor have not
provided with any actual authority in order to duly make contracts. This acts as a main reason
that made company made liable to pay to claimants.
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As per according to, Kelly v Fraser [2012], this has been evaluated that Mr. Fraser
member of Salaried Staff Pension. This has been determined as per in accordance with the rules
and trust deep of SSSP all the individuals within administration and management get treated as
trustees. Along with this, daily routine activities of management were being offered to
Employee Benefits Division of entity (Jackson, 2014). In addition to this, all trustees posed with
single discretion . This indicated that on the basis of this refusal to any form of transfer benefit to
SSSP form other form of pension scheme can be done (Pavlakos and Rodriguez-Blanco, 2015).
Furthermore, this case judgement indicates that actual authority was duly given whether
expressed or implied. Along with this, in accordance with the judgement of Privacy Council, if
any circumstances arise them an individual can force to act as an agent. Along with this,
individual hold an responsibility to duly communicate required and essential information to other
individuals those who operate their functioning within organisation.
First Energy (UK) Ltd. V Hungarian International Bank Ltd. (1993) case denoted that,
in this judgement that are duly provided states that there is no actual authority that has duly
provided to sanction the loan. As per according to policies this has been stated that manager hold
the duly to effectively communicate essential information related to loan application to
organisation top authorities before sanctioning it. Judgement that has been provided by judge
main intention is to offer proper and effective protection to individuals form any kind of faults.
This is mainly based on a reasonable set of expectation in which this has been identified that, if
an individual who have done any form of mistake and is honest are must to be protected with
relevant law.
Summers v Salomon [1857]case states that ,according to this case this has been identified that
principal of jewellery shop who acts as principal with an agreement made agent to his nephew.
Furthermore, this has been identified that agent had purchased jewellery by making order from
supplier. All this get happened after office. Just after this incident, this has been determined that
agent was nowhere to be get traced. In this, this has been evaluated that, court duly provided with
the judgement in which order was made that states that nephew who acts as agent are made liable
. This this court ordered judgement that agent hold responsible for all his acts and are
significantly liable to jewellery shop principal.
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In context of agent and principal relation, it is necessary to understand that Duty not to
delegate authority plays the most crucial role. It is quite crucial for agent to understand that
whenever they enters into the contract, then in that respective situation agent are also give the
duty to not distribute his/her part of work to any other person. It is because ultimate liability is
always required to be hold to by principal (Singleton, 2015). If in any of the situation agent does
exactly against the law, then in that respective circumstance ultimately responsibility will be
carried by agent himself. If sub- agent are hired in some of the exceptional case, then it will be
necessary for agent to understand that liability will be still in his hand. Even, it is said that main
motive behind hiring the agent is to provide authority to perform some of the important task
within the organisation but if they hire sub agent then it creates issues for the principal. It is
because some of the personal information can be shared easily which can create further issues.
The famous case between Rose v Wilson Simply states about duty not to delegate authority.
Here, Rose has made claim against Wilson because he had hire sub-agent under him who took
some of those decision which was against the policy of principal. Here, principal had to suffer
from several losses and even goodwill was affected from it. Looking at the situation of the case,
judges of case explained that in any of the situation, agent are not allow to delegate there roles
and responsibility to any other person. So, it will be the responsibility of agent to pay all of the
expenses or losses from which principal has to suffer. In short, agent are not allow to delegate
the duty of to any of the other person.
As per according to the above mentioned discussion it has been concluded that agency
relationship is significantly defined as a wide concept in which individual who are authorised as
an agent are allowed to act on the behalf of other other individual namely principal. Further, this
has been determined that there are two parties that are involved in this agreement namely agent
or principal. In this agent is authorised and allowed to conduct deal and transactions on behalf of
company and principal. In addition to this, it has been identified that it is essential to undertake
contract by taking advantage of agreement as with the help of this both agent and principal get
certain set of rights. This will significantly allow both of them to undertake legal actions and
benefits.

REFERENCES
Books & Journals:
Gibbs, A., 2016. Taking Agency Seriously: An Examination of Legal Integration and
Constitutionalism. In 'Integration through Law'Revisited (pp. 47-60). Routledge.
Singleton, S., 2015. Commercial agency agreements: Law and practice. Bloomsbury Publishing.
Pereboom, D., 2014. Free will, agency, and meaning in life. Oxford University Press.
Agustina, E., 2019, August. The Action of Public Law by Agency or Officer State
Administration that Violates the Law: State administrative law perspective. In First
International Conference on Administration Science (ICAS 2019). Atlantis Press.
Garvin, M. and Beloof, D.E., 2015. Crime victim agency: Independent lawyers for sexual assault
victims. Ohio St. J. Crim. L. 13. p.67.
Brito, J., 2014. Agency Threats and the Rule of the Law: An Offer You Can't Refuse. Harv. JL
& Pub. Pol'y. 37. p.553.
Pavlakos, G. and Rodriguez-Blanco, V. eds., 2015. Reasons and Intentions in Law and Practical
Agency. Cambridge University Press.
Borges, W., 2014. Understanding the Meaning of a Certified Commercial Collection Agency in
Today's Credit World. Com. L. World. 29. p.16.
Jackson, C., 2014. Structural and behavioural independence: mapping the meaning of agency
independence at the field level. International Review of Administrative Sciences. (2).
pp.257-275.
Online:
Freeman and Lockyer v Buckhurst Park Properties (1964). [Online]. Available through :<
https://swarb.co.uk/freeman-and-lockyer-v-buckhurst-park-properties-ca-1964/>.
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