Legal Aspect of Business: Duties of Agents

LEGAL ASPECT OF
BUSINESS

INTRODUCTION
Legal aspect of a business are those rules and regulations which are formed by an
government of a country for smooth running of business and company. These aspects are their in
order to give an framework and a concrete structure which are formed by those authorities who
are specialised in legal field. In a sense it can be understood in simple way that is supreme most
authority in a country forms legal aspects. The rules and laws prescribed in it are mandatory to
follow by those persons doing business. These concept is also applicable towards formation of a
company of any type. Agency means an business or an organisation which is formed for the
purpose of giving services towards a specific thing.
They are formed because of fiduciary relationship between two partners. It is an
representative of a group and business which means that functions performed by agencies is for
an organisation, business or a person who is running a business. In context to law it is an
important part of business law which is dealing with contractual and quasi-contractual
relationships which includes an agent who performs an act on behalf of a principal for a third
party. An principal and agent relationship is interrelated with each other in a manner that work
performed by an agent is directed by principal to him. Nature of agencies is to perform those
functions which helps in strengthening relationships of an employer and employee. An agency is
of contractual nature which means it acts according to a contract which is signed by it. These
contract can be revoked if there is any complain against agency and also services provided by it
is not satisfactory towards customer. Scope of agency is very dynamic as it helps both private
and public sector to connect with there customers in more effective manner.
An tripartite relationship are those kinds of relationship that takes place between an
employer and employee. These relationships are formed to create a strong bond between an
person working and person who higher him for purpose of work. This is better understood
through relationships of labour which is of very dynamic nature . Rules and regulation which
governs these kind of relationship and creates an environment for building of such kind of
relationship between principal and agent comes under tripartite relationship. This project is going
to cover concept of duties of agents in details with relevant cases.
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MAIN BODY
Definition: Agency is that kind of mediator which comes in contract with another
company or an organisation to provide goods and services on behalf of the company that has
ordered an agency to do so. Theses are performed by two parties that is principal and agent.
Agency relationship means an agreement in which an legal entity hires another legal entity to
perform an activity on his behalf. Key features of an agency relationship are it helps in gaining
sustainability in generation of revenue, technology is helpful in increasing easiness in agency .
Scalability of business is maintained and creativity in an agency is enhanced.
There are various duties that are required to be followed by these agencies (Duties of
Agent 2015). These are there only till the time contract between the parties is in existence legally
under the eyes of law. The duties are very important from the point of view of principal as they
are their in order for safe guard of principal from any kind of problem which can occur legally.
The duties are not followed properly by the agencies then the principal company has to face
consequences of it because of existence of tripartite relationship and strict liability of tort. If
these duties are followed properly by agencies then the principal is not going to face these
consequences. Duties also covers aspect, concept and major points of smooth working of an
agency according to law and are very essential to be followed by agency to maintain legal
stability.
The very first duty required to be followed by agent towards principal is 'Duty to
delegate authority'. This duty tells about appointment of an agent to preform a particular
transaction by acting as an representative of a company. An agent has a duty to perform for the
principal which is to act as per interest of principal (Bahli and Rivard, 2017). This interest
should be within the limits of an agent performing it. It is achieved by an agent through his or
her skills and intelligence of doing negotiation. An agent has to come to a best conclusion over
an negotiation which creates advantages for principal under hardest circumstances. In a simple
manner the main aim of this duty is to create those circumstances which create higher amount of
interest and value for principal. This duty helps in boosting of relationship of an agent with
principal in order to full fill the goal of achieving interest for the principal. In a simple manner
this can be understood as if any mistake is done on behalf of agent them all the consequences of
it is to be faced by principal who has appointed agent to perform the task. Relevant case law for
this is Chaudry v Prabhakar in this case the facts are claimant has passed her driving test and
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