(Solution ) legal aspects of business
Added on 2020-10-22
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Legal Aspects of Business
Table of ContentsINTRODUCTION...........................................................................................................................1MAIN BODY...................................................................................................................................1CONCLUSION................................................................................................................................5REFERENCES................................................................................................................................7
INTRODUCTIONLegal aspects of business also covers law of agency and this law has significanceimportance in the area of business For Example partners of a partnership firm are acts as anagent of the partnership firm, a company relies on its board of directors to run its operations here,board of directors act as an agent of the company and a business firms relies on its agent tocollect money from its debtors. Agency law is a contract which establishes fiduciary(legalrelationship of trust) relationship between the agent & principal in which a contract is madebetween principal & agent where the principal give authority to agent to act on his behalf. So,according to this law the principal make a legal contract with the agent that authorizes the agentto deal with the third party & to negotiate with the third party. According to the Law of Agencythere are three types of relationship exists, relationship between agent & principal, principal &third party, agent & the third party. With the respect of this law, role of principal in principalagent relationship is to give authority to the agent and to give payment to the agent and role ofagent is to complete the task by following due diligence. Authorities are transferred to the agenteither with the consent of principal or not & on that basis it is divided in to two types actualauthority & apparent authority respectively. Actual authority can be express or implied whereasapparent authority is further classified in to necessity & usual authority. MAIN BODYCommercial law is a law which describes all the provisions & rules regarding trade &commerce, merchandise and sales. Agency Law in United Kingdom is part of Commercial Lawof UK. Law of Agency is a law which authorizes agents to act on the behalf of principal and itestablishes fiduciary or legal relationship among principal, agents & third party. Without this acta company cannot perform various task and apparently it reduces productivity & profits of thatparticular business or company. This law is important in the area of commercial law and it isused in the all area of business such as real state, stock brokerage, accountancy, insurance &business management. According to this law relationship among the principal & agent can becontractual, quasi contractual & non contractual. The main objective of this law is to transfer ofauthority to the agent and it can be transferred wither by taking consent of the principal or not.Law of agency provides smooth functioning of business of any company and organisationbecause authorities & powers are divided which reduces work load and that results in effectiveresults(Mitnick, 2015).1
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