Legal Aspects of Business

This article discusses the legal aspects of business and the relationship between principal and agent. It explores the duties and responsibilities of an agent in accordance with agency law. The article also highlights the different types of agency relationships and the authority given to agents.

Legal Aspects of
Business

Table of Contents
INTRODUCTION...........................................................................................................................1
INTRODUCTION...........................................................................................................................1
MAIN BODY ..................................................................................................................................2
Critically discuss the statement...................................................................................................2
REFERENCES................................................................................................................................7

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INTRODUCTION
Agency is defined as fiduciary relation creation among two individuals such as Agent and
principal. In this rights are mainly provided to agent in order to undertake decision of the behalf
of principal in order to duly fulfil organisational goals as well as objectives (Agency Definition,
2019). This form of relationship is basically develop by making entrance into a contract. This
can either in expressed or implied form.
Most important aspect that are required to be consider with agency is that, agent is
required to operate only those task for which they are permissible Sobotka v Forbes [ 2019]. In
addition to this, it is essential for an agent to not undertake decisions that may lead towards
creating issues for principle as ultimate liability will be of principal .
If it is talked about Tripartite relationship, this has been signified that relation is mainly
developed between insurer, its insured and also defence counsel which has been retained by the
insurer for the purpose to defend the insured against the third party claim (THE INSURANCE
TRIPARTITE RELATIONSHIP WHO IS MY CLIENT ANYWAY, 2017). This is a situation,
in which right is mainly given to claim damages from third party if insured as well as insurer
party engage in any from of activity which is unlawful.
This has been identified about nature of principal relationship/agent that, it can
effectively been stated as a condition in which agent is provided with rights to undertake certain
form of decision that are essential for an organisation Cross v Miller [ 2020]. Further, it act as
those decision with the help of which overall burden from principal can be reduced in a
significant manner. In addition to this, it has been evaluated that it is having most important
nature that allow agent to undertake those decision with the help of which business entity can
significantly able to increase the change of fulfilling goals automatically (Bogomolov and et. al.,
2018).

In relation with present report, there are numerous set of topic that are being duly discussed that
are directly related to topic that are further link with relationship among principal and agent.
Certain essential aspects related to the duty of avoid conflict of interest, the duty of care and
skill etc Crane v Spence [2019]. In addition to this, it has been determined that relationship
among principal and agent must be formed with a legal procedure in which it is essential to
provide every related information to principal related to responsibility as well as right that are
required by an agent to conduct.
In context with present case, there are different measure through which an agency can be
duly created for instance, it can be formed with the assistance of appointment. Along with this an
option is also available through which agency can be formed by estoppel where implied
appointment will be applicable Treiblmaier v Beck [2019]. Also, there is the option to form it in
the manner of expressed contract. In this both principle as well as agent is required to decide
related to action and authority that are obligatory to be undertaken in order to offer welfare to
specific organisational entity.
MAIN BODY
Critically discuss the statement
In context with present scenario, agency law act as most essential law that mainly include
discussion related to legal relationship among principal as well as agent. In this, it becomes
essential for each and every principal as well as agent to perform their functioning as per in
accordance with regulations as well as legal laws (McKnight, Marstrand and Sinclair, eds.,
2019). Further this has identified by law that, agent only get specific form of duties that are
required to perform for instance, duties related to abide reasonable and lawful instructions that
are mainly provided by principal. In addition to this, it is important for them to operate any of
their activity or function with the effective utilization of their skills in order to extract from the
decision that has been undertaken by them. Further this has been stated by agency law that, agent
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also hold the responsibility related to avoiding any conflict that may get arise because of
personal benefit as this will lead towards raising a question. In addition to this, agent is also
required to ensure that they did not accept any form of bribe for their personal benefit as this will
lead towards direct breach of agreement that are duly signed among principle and agent along
with agency law that are duly applied in their context. This has been defined in accordance
with the law that an agent is required to perform any of their work as per in accordance law and
did not allowed to undertake any decision that will lead towards raising question against
principle. Further this has been identified by agency law that agent must not perform act those
specific situation where they are not provided with any rights as this may generate issues for
principal. By accomplishing all these regulations as well as rules agent can effectively able to
fulfil desirable outcomes in a best effective manner. Gledhill v Bentley Designs [2010], this is an
landmark case in which discussion related to obligation of agent that are required to be comply
by them as per according to instruction that are given by principal is being mentioned (Gledhill v
Bentley Designs, 2010).
In addition to this, it has been identified that there are different form of examples in
which inappropriate agreement among principal and agent lead towards creating situations that
can create problem. Further this has been evaluated that if an agent and principal create an
agreement it is required to be in an written format as with the help of this they can effectively
able to decide duty and work in a well defined and effective manner. Along with this in case, this
has been evaluated that in that respective situation burden of proof will be in the hands of
principal and that can create number of superfluous problems.
It has been defined that agent are termed as an those individuals those who are able to
make decision to what is right or wrong as even smallest mistake lead an entity to face hefty
mistake. It is the responsibility of principal to ensure that they hire potential agent into contract
who can effectively able to track from the situations that will turn out to be beneficial for both of
agent as well as principal.
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It is essential for an agent to have numerous qualities along with specific and appropriate
knowledge related to legal rights as well as law in order to formulate effective decision making
as per in accordance with the particular situation Arnold v Bowie [ 2019]. Further it has been
identified by law that if an agent duly fails to fulfil desirable standards then it is denoted as
prima facie negligent. In addition to this, it has been evaluated via law that agent also hold
responsibility related to have proper review of every activity in a well defined as well as
systematic manner as with the help of this they can effectively able to fulfil desired objectives
according to standard. 1, is stated as an essential case law in which judges give judgement that
denotes that, an agent by signing an agreement within principal are required to have review
related to each and every activity or task in a systematic way (McNay, 2016). With the help of
this, they can significantly able to make reduction in the chances of error.
As per in accordance with present case, any principal appoint agent just for their personal
benefit as with the help of this they can make significant reduction in workload and can further
allow principal to have focused approach towards other department (Boguslavski, Levitsky and
McCauley, 2019). An agent play significant and essential role within an entity, and by
identifying situation this has been evaluated that it is important for an agent to perform their
activity and work from one particular principal. Further this has been determined that in any
condition that are not authorized as allowed to formulate decision in which they have to involve
themselves with any other principal. In addition to this, it is the duty of an agent to make sure
that they did not develop any situation that will lead towards creating conflict as by working with
different individuals there is a possible chance in which information of confidential nature may
get leaked that will lead them towards non accomplishment of goals and objectives.
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Rossetti Marketing Ltd v Diamond Sofa Company Ltd and another [2011] EWHC
2482,duly defines that an agent hold the right to conduct their work for different entities (Can an
agent act for competing principals, 2012). Apart from that, if any principal want agent to perform
their work with them then in this case it is essential for them to state all the terms as well as
conditions in a contract in a clear manner. Apart from that, it has been signified that if agent do
not want to generate issue for any principal from whom they work, then in this case agent can
make due disclosure of the information related to principal from whom they work.
[Note: This has been stated under law that if any principal face issue or loss because of their
agent, then they are authorized to sue agent in the contract of breach of a duty.]
This has been evaluated that responsibility as well duty of an agent are not only limited to
operate their task in accordance with the standards but there are different form of other duties
that are required to be undertake by them. As per according to agency law, this has been
determined that agent hold the responsibility related to maintaining record on daily basis of the
work that are being assigned to them. Along with this, if in a situation principal give any
property to agent then in that case agent is required to ensure that they did not sell any property.
Along with this, agent is required to give back property to principal if relationship among them
get ceased. Another essential duty of an agent is related to make sure that they keep their
personal as principal profit on a separate basis.
There are different form of roles as well as responsibility that are effectively required to
be duly undertaken by an agent in each and every essential aspect of agreement. In this, it is
important for an agent to make sure that they did not delegate their responsibility as well as
duties to any other individual on any condition with mentioning on an written basis on
agreement. Agent hold most important responsibility in which they are required to perform all
the work that has been delegated to them in a well defined manner (Agent's duties to principal
under common law, 2019). Apart form that if agent give their work to sub agent, then even in
this situation agent is responsible. As principal are only known with agent with whom they have
directly entered into contract.
Apart from this, there are different form of exceptions that has been made by law of
agency in context with respective law. For instance, by taking prior permission an agent can
effectively able to conduct their work with the help of sub agent. In addition to this, it has been
mentioned in law that if principal hire agent, in this case agent is responsible for all expenses that
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are being incurred by an agent. It has been identified that if in case agent hire sub agent then it is
essential for them have understanding of the fact that agent are required to bear all charges as
well as expenses. This is also signifies as a duty of agent whenever they made contract with
principal.
Finally, this has been identified that there are different types of responsibility as well as
role responsibility that has been hold by an agent that are assigned to them after entering into an
agreement with principals. In addition to this, it has been identified that as per the law agent is
not allowed to perform any of the work that entitled them secret profitability. Apart from that
breach of act will allow principal to undertake legal action in which they are entitles to recover
amount of damages that are being incurred by agent. For instance, Principle provide agent with
the house property for stay. In this agent is not allowed to transfer or lease the property to other
individual as it is against of duty. Tan Kiong Hwa v. Andrew S.H. Chong [1974] 2 MLJ 188, a
landmark case indicates that there are different form of responsibilities as well roles given to a
agent, but agent tried to gain profit on a secret basis of $9000. This falls under breach of
agreement.
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In short, this has been identified that an agent hold different types or responsibilities that
are duly required to be undertaken by them. In certain situations where agent are required to act
by their own, in this situation agent is required to make sure that any of their activity does not
create issue form principal and themselves.
CONCLUSION
As per the above mentioned report it has been concluded that agency law define different
of of regulations as well as laws that are required to be obliged. With the help of this both
individuals as well as agent can effectively able to perform their functioning in accordance with
standards. In addition to this an agent is required to ensure that, all the activity that are being
conducted by them must be as per according to agency law. This will allow them to undertake
decision in best effective manner. Further this has been evaluated that an agent must make sure
that their activity does not affect any law and principal. Furthermore, this has been identified that
by analysing all the above given factors this has been evaluated that agency relationship is
termed as a wide concept in which an individual is allowed to represent to represent other. This
mainly involves two parties that are agent or an principal. In addition to this, this has been
evaluated that principal allows an agent to conduct activities on their behalf and undertake
formative deals as to conduct activities and transactions. The relationship among principal and
agent are mainly get formed with the help of agreement. As this not only benefit agent but also
provide legal rights to principal. Furthermore, the authority can be given in any form such as
implied, expressed or ostensible. Each of these have their own features and occurrence. The
agent has his scope limited to his authority which may or may not be actual.

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REFERENCES
Books & Journals
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enforcement, and criminal procedure. The Journal of Legal Studies. 45(1). pp.105-141.
McNay, L., 2016. Agency. In The Oxford handbook of feminist theory.
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.
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Boguslavski, M.M., Smirnov, P.S., Levitsky, S.L., Boguslavski, M.M., Levitsky, S.L. and
McCauley, D.M., 2019. The Reorganization of Soviet Foreign Trade: Legal Aspects:
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McKnight, A.D., Marstrand, P.K. and Sinclair, T.C. eds., 2019. Environmental pollution control:
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Cross, F.B. and Miller, R.L., 2020. The legal environment of business: Text and cases. Cengage
Learning.
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analyses. Routledge.
Caldwell, J. and Mule, S.J. eds., 2019. Amphetamines and related stimulants: chemical,
biological, clinical, and sociological aspects. CRC Press.
Walter, E. ed., 2019. Regulatory and Economic Aspects in Oncology. Springer.
Treiblmaier, H. and Beck, R. eds., 2019. Business Transformation through Blockchain. Cham:
Palgrave Macmillan.
Crane, A., Matten, D., Glozer, S. and Spence, L., 2019. Business ethics: Managing corporate
citizenship and sustainability in the age of globalization. Oxford University Press, USA.
Arnold, D.G., Beauchamp, T.L. and Bowie, N.E., 2019. Ethical theory and business. Cambridge
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Online
Agency Definition. 2019. [Online]. Available Through:
<http://www.duhaime.org/LegalDictionary/A/Agency.aspx>
THE INSURANCE TRIPARTITE RELATIONSHIP WHO IS MY CLIENT ANYWAY. 2017.
[Online]. Available Through: <https://lgwmlaw.com/news-media/THE-INSURANCE-
TRIPARTITE-RELATIONSHIP-WHO-IS-MY-CLIENT-ANYWAY/>
Gledhill v Bentley Designs. 2010. [Online]. Available Through:
<http://www.agentlaw.co.uk/site/case_summaries/gledhill_v_bentley_designs.html>
Can an agent act for competing principals. 2012. [Online]. Available Through:
<https://www.agentbase.co.uk/legalarticles/can-agent-act-competing-principals-2/>
Agent's duties to principal under common law. 2019. [Online]. Available Through:
<https://www.eaa.org.hk/en-us/Information-Centre/Publications/Agency-Law/-5-
Agents-duties-to-principal-under-common-law>
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