Legal Aspects of Business: Agency Relationship, Types of Agent Authority, Apparent Authority

This report discusses the definition and characteristics of agency relationship, types of agent authority, and the analysis of essential components of apparent authority in the legal aspects of business. It also includes a reference to a relevant case study within the area of agency law. The report provides insights into the subject of legal aspects of business.

LEGAL ASPECTS OF
BUSINESS

Table of Contents
MAIN BODY ..................................................................................................................................3
Definition and characteristics of agency relationship.................................................................3
Description on types of agent authority......................................................................................4
Define the analysis of essential components of the apparent authority......................................6
Provide reference to the relevant case within the area of agency of law....................................7
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Legal aspect of business termed out indispensable part of successful business
environment within country (Marino, 2019). Therefore, basic legal three forms such as sole
proprietorship, corporation and partnership. Agency relationship termed out as fiduciary
relationship that allows an agent to act on behalf. This is termed out as consensual relationship
within the two individuals. In this, one person acts on behalf of other individual and in which the
agent can form the legal relationship on behalf of principal.
The present report is based on to undertaken the discussion in terms to features of agency
relationship and various kind of authorities to agents. Thus, study will also discuss in terms to
apparent authority. Additionally, assignment will lay emphasises on varied kind of essential
components of apparent authority and case law within the area of agency law.
MAIN BODY
Definition and characteristics of agency relationship.
This is defined as procedure in which one person acts on behalf of another. It is termed
out as relationship that is created in which one principal individual appoints the another
individual to act on its behalf (Bialobrzeska, Parzuchowski and Wojciszke, 2019).
Agent can be termed out as an individual as business partner, employee of any kind of
firms as outsourcing and accountancy. Thus, one of the crucial part of agency relationship is that
agent is termed out as individual that acting on behalf of principal and this kind of authorisation
will be written on contract and this undertakes the actions in which an agent can do and can not
do. Additionally, this can be stated that authorisation can be given by principal in orally manner
to agent and this relationship will be implied within varied kind of circumstances. In this
principle is showing special trust as well as confidence in agent to act within manner that
provides varied beneficial aspect to principal every time.
On the other hand, this can be stated as the business relationship in which principal offers
legal authority to an agent to act on behalf of principle at the of making deal with third party.
Thus, characteristics to the agency relationship defined in following manner as are-
The relationship of agency can be exists between two individuals in which one of whom
expressly or impliedly consent the other should act on his behalf. This also affects the

relationship with their party. However, this is defined as considered view in which agency is an
express and also be called out as implied derivation of authority by agent, one party and from
any other party (Wheeler and Bertram, 2019). So, this is defined as consensual relationship
within the both the parties in which the one party has acquired the legal rights for the another.
Thus, following consideration towards to contract of agency as are-
 Representation- The agent authority is always represents as his or her principles at the
time of dealing with the third parties. Therefore, agent is defined as responsible
individual for the work of principals.
 Delegation of authority- The principals is defined as individual who delegates his
authority to agent to undertake the things on behalf of individual. Therefore, the contract
of agency initiates with principal that appoints the agent along with the authority
delegation.
 Contractual capacity- Under this, it can be stated that both the principal and agent must
be competent with eye of law. Henceforth, they considered to be incomplete at time when
they have unsound mind, disqualified in the eyes of law minor.
 Consideration is not required- Under this, this is not crucial to take legal consideration.
For example- The wife can take the role husband without any consideration.
 Purpose- In this, it can be stated that any agent may be appointed for the object of
principal likes. There are many purpose in which agent can be appointed as are- Buying
and selling of commodities, dealing with customer and deposit money in bank account.
Description on types of agent authority.
Under this, the various kind of authorities that can be given to an agent in terms to carry
out the actions on behalf of principals. Thus, there are the two main authorities that can have
agent. Hence, these are defined in following manner as are-
Actual authority- It is termed out as authority in which an agent by the principal defined as the
actual authority. Henceforth, this can be classified into the categories as express and implied.
Additionally, an authority is can be termed out as example in which the words can be written and
spoken (Oeter, 2019). Thus, express authority defined in which principals has expressly given to
agent the form as orally or within the writing form. On the other hand, implied authority can be
termed out as agent to do those things that are reasonably incidental and crucial for undertaking
effective performance of his duties. In this, the content of implied authority is highly dependent

on the facts of the each case and this can be determined with help of usage and custom of the
trade, profession or business. The one of the main scope of actual authority of agent is to be
ascertained with help of oral or written agreement between agent as well principal. If the agent
enter into the contract with third party that is can be taken as pursuant to his actual authority and
the contract that entered can create contractual rights and liabilities between the third party and
principal.
Apparent and ostensible authority- The agent can be defined as apparent and not actual
authority in the following grounds as are-
The principal is defined as authority that has made representation with the help of words
or conduct to the third party to effect that agent who has one specific authority to act for him,
although, the their party has made alteration in his position that results from such reliance. It can
be understand with help of example as to assuming obligation under the contract with the agent.
In addition to it, the apparent, essence and ostensible authority in which the principals has
induced about the third party that has believed (Cotterrell, 2006).
On the other hand, agent is only have the appearance of the authority but they do not have
any kind of actual authority to act on behalf of the principals. Additionally, this can be stated that
the ostensible and apparent will given rise to the agency by estoppel. Henceforth, the principals
representation to the third party can be termed out as authority of the management to act on his
own behalf. This is termed out as estoppel in which prevention needs to be undertaken on behalf
of principles from denying the contract that is binding on him.
Definition of the apparent authority.
It is termed out as situation in which the reasonable third party will understand that an
agent has the authority and he has to act on it. In addition to it, this is termed out as principals
that is bound by the actions of agent. In also the situation in which agent had no any actual
authority whether the express or implied. It is defined as an authority that may be given by the
firm who has providing an individual that has no authority to make contract or decision. This is
the authority that may arise at the time of giving someone right who has no authority to contract
any kind of materials, forms, stationary with logo of firm etc. Additionally, an individual with
the apparent authority has not any kind of actual authority may offer a price quote on
commodities and services that is binding on a firm (McDonagh, 2019). The significance of
apparent authority can be relevant for particularly constitutional and corporate law.

However, it can be stated that the doctrine of apparent authority is mainly based on the
concept of estoppel. Thus, this mainly prevents the principals from denying the existence of
agency to the third party. This term can be understood with help of example as dealer of the car
may seem as to be a salesman to a buyer to all the accounts besides buyer get thrilled by having
off of 10000 from asking the cost and salesman tells the buyer to come next to pick a car. On the
very next day when buyer comes to dealer of car and ask to sales man in terms to get order for
getting new car but on that buyer came to know that salesman was actually a car mechanic and
do not have any authority for binding the deal. So, in this case buyer has understood that
mechanic was considered as to be the authority to sell the car and this action of mechanic has
mad the buyer to believe about the mechanic that he was the owner agent and has acted as sales
man. Therefore, this is defined as apparent authority (Park and Youm, 2019). In addition to this,
it has been defined that apparent authority has the power of action in which he has given an agent
an order to act on behalf of principals that may not be implied or expressly granted.
Define the analysis of essential components of the apparent authority.
There are number of the crucial components that are required for the apparent party and
some of crucial needs are mentioned in below context as are-
There must be creation of agent that has authority- It can be termed out as one of the basic
acquirement of the apparent authority. So, there must be adequate presentation of the agent that
have effective rights of authority. This has already mentioned in the above example that
mechanic was the actual sales person due to his action that his made it more and more
representative with help of offering of 10000 off. Henceforth, the mechanic seemed to be a
salesmen to buyer within the all of the account.
Representation must come from principals- It is another crucial requirement within which
apparent authority is defined as that has representation and that come from the principals. In the
above mentioned case, it has been clearly noted that mechanic was working only for the car
dealership owner and he has apparent authority to sell car to customer's and talk to them to
motivate and convince then within efficient mode that was a part of his job. This is the
representation that has come from the part of the principal. There has been varied of action in
which mechanic has power of action by the owner on behalf of the principals. Thus, this is how
representation had come from the principals and the third party that have made there inference
on behalf of the agent.

Representation must based by the third party- It is termed out as to be one of crucial element for
apparent authority. In this, authority can be highly dependent on someone who is unaware that
for agent do not have any kind of actually authority (Park and Youm, 2019). If an individual with
the agent and believes in something or may have a specific explanation to trust that transactions
for the commercial interest of the agent principals that is very typical for the individual to assist
with any kind of the credibility about believing the agent and this has actual authority to carry
out the actions on behalf of the principals.
Provide reference to the relevant case within the area of agency of law.
The case is as- Southern cross Television v price pvt Ltd
In the year of 2007, Cassandra price, the plaintiff was in the group of individual who
were filming about the series of Television in terms to shoot the series. It is stated that there were
almost four members within a group and climbed to a top of drop-off and they conscious to jump
in the river that was 13 meters in height. Henceforth, plaintiff jumped into the water and she
injured back while hitting the surface of the water and this has sustained the fracture in the
vertebra. In this taken case study, the plaintiff has sued on the southern cross and Mr Davis for
the damage caused due to the negligence.
Background
In this case study, the girl named as Cassandra price and the plaintiff was in the group of
hotel that were involved in filming television series in terms to shoot the series. In the late
afternoon, the entire group climbed towards to cliff that is above the cave. However, the whole
of the group supposed to jump from the height of 13 meters. On the other hand, it was the
plaintiff who jumped first and after jumping into the water she broke her vertebra. As she got hit
by the surface and she also got the various fractures in her body (Park and Youm, 2019). In this
way, she sued on the two parties and that were as Southern Cross Television and another was Mr
Michael Davis and his is the perform who is considered as the the proprietors of the business that
known to be as Island Ocean charters that is an individual authority who was offering the charted
driving tours.
Decision-
In this closing submission, it can be stated that the jump was not a part of program but it
was the plaintiff who has mistakenly though that she has to Jump out as she was considered to be
the part of the whole series. Thus, she has also stated that the filming was the part of television

program and she was obliged to jump into the water. In this way, the amendments were
disallowed on the basis of plaintiff subjective state of mind and this was also considered as
irrelevant to the duty of care.
Comments- In the above stated case, the plaintiff has believed that the agents and makers or the
film must have the right to offer the instruction during the making of the film and this was all
about the assumption made by the third party. Therefore, she had not given any instruction about
filming jump into the water on behalf of the plaintiff. This case has resulted into confusion for
her. It was the real case of the apparent authority as the plaintiff and then she believed that she
has jump into the water.
Thus, it can be concluded that principals must be sure about the agents who must be
aware of the extent of authority that is particularly in relation to signing of contracts. Hence, it
can be stated that this is very crucial for the third party in terms to limits of the authority in terms
to minimise the misrepresentation.
CONCLUSION
From the above aforementioned report it can be concluded that agency relationship can
be termed out as fiduciary relationship in which an individual allows as an agent to act on his or
her behalf.
Furthermore, report has covered the activities as characteristics of agency and types of
agent authorities. Lastly, the case study has also been taken Southern cross Television v price pvt
Ltd to determine the area of agency law specifically.

REFERENCES
Book & Journal
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the initiative?. Managerial and Decision Economics. 40(2). pp.127-140.
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versus the recipient perspective seems not to affect the relationship between agency-
communion and self-esteem: A small-scale meta-analysis. PloS one. 14(2). p.e0213183.
Wheeler, A.M. and Bertram, B., 2019. The counselor and the law: A guide to legal and ethical
practice. John Wiley & Sons.
Oeter, S., 2019. Conflicting Norms, Values, and Interests: A Perspective from Legal
Academia. Ethics & International Affairs. 33(1). pp.57-66.
Cotterrell, R., 2006. Comparative law and legal culture. In The Oxford handbook of comparative
law.
McDonagh, F., 2019. What Constitutes a Catholic School in 2019? A Legal Perspective. Studies:
An Irish Quarterly Review. 108(429). pp.8-19.
Park, A. and Youm, K.H., 2019. Fake News from a Legal Perspective: The United States and
South Korea Compared. Sw. J. Int'l L.. 25. p.100.