Liability of Boutique Owner in Agency Law

This report discusses the liability of a boutique owner in agency law and the rights and obligations of the owner. It also explores the application of agency law to a specific case involving an order made by a salesperson. The conclusion highlights the legal obligation of the owner to pay for the order.

Running head: REPORT 0
business law
APRIL 9, 2019
STUDENT DETAILS:

REPORT 1
Issue
Following are the issues of this case-
1. Whether an owner of boutique ‘Roxy’ is liable to pay invoice for the order made by
Maggy.
2. What are the rights and obligation of Roxy as per the agency law?
Relevant law
The principal and agent make the agency relationship. In this relationship, the
principal renders the permissible authority to the agent to act on the behalf of principal at the
time of dealing with other party (Pont, 2018). All the agency relationship is the fiduciary
relationship. The agency relationship refers to the fiduciary relationship, which involves the
some level of faith and confidence. As per the agency law, the agent is permitted to act on
behalf of the principal. The agent is allowed to make contractual obligation between third
people and principal. It is an obligation of the agent to do act in the best interest of a
principal. The reason is that the actions of agent would make the lawful obligation for his
principal. As per the agency law, the agent is permitted to do work on the behalf of a
principal as if a principal was presenting and performing alone (Amani, 2016).
For an instance, on the behalf of principal, Andrew made a contract with John to buy
500 articles. John made the delivery of 500 articles on time. However, the principal failed to
make the payment of articles to John (McCarthy, 2017). In this case, the principal did not
make the deal with John to buy 500 articles, but this is the legal liability of principal to make
the payment of bill of article. In this case, Andrew is not legally responsible for make the
payment to John because Andrew was acting as an agent at the time of making the deal.
Andrew and principal have the express agreement that means the agent as well as principal
were agree to an agency relationship as per oral agreement or written agreement. The
principal asked to buy the articles on his behalf and Andrew agreed to do so. The agency
agreement is created through the intention of the people (Duncan & Christensen, 2016).
However, it is not mandatory that all the agreements are the express agreements. It is
also possible to make the agency through the implied agreement. It means that action of both
people expresses the intention to make the agency relationship. The agent does work on
behalf of the principal by the implied authority, instead of the stated agreement. For an
instance, the principal is out of town. The principal left Andrew in charge of store. The
principal never told Andrew to buy inventory. Andrew placed the order to John even though
the principal did not particularly tell to do so. It is the implied agency. The reason is that
Andrew was performing with implied authority of principal as a person in charge of store
(Cohen, 2017).
Moreover, as per the principal of estoppel and ratification, the agency relationship
may also be depended on apparent authority. This kind of agency is neither implied nor
express. In its place, the apparent authority is while it is properly assumed by the third party
that the principal gave the authorities to the agent. The apparent authority is supposed to

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present by the third people by making observation of the actions of principal. In a case where
a principal performs as though there is an agency relationship with an agent, at that time a
principal would be lawfully bound by conduct of agent (Bogomolov, Streufert & Knight,
2015).
Application of law to the facts
It appears from the facts that in the given case study there is an agency relationship. In
a given case, Roxy has an exclusive boutique. Maggy was senior salesperson and wanted to
quit this job. Roxy wanted to not to go Maggy from boutique. Roxy raised her salary and
appointed her as a Manger. Roxy does not give her an authority to take the decision of the
business. Maggy was not permitted to order new stock. However, Roxy introduced her as
manager in the front of others. Roxy sent Maggy to attend the fashion show. In that Fashion
show, Maggy met with Gerg, who was the retail representative of Zala clothing. Maggy gave
the order of new stock worth 55000 $ to Zala clothing. Roxy refused to pay 55000 $ after the
delivery, when Roxy came to know about this (Bogomolov, Streufert & Knight, 2018).
In this case, as per the agency law Roxy is liable to pay 55000 $ to Zala clothing
because there is a fiduciary relationship between Roxy and Maggy. Roxy gives legal
authority to Marry to perform on the behalf of him at the time of dealing with other party.
Maggy had an implied authority to place the order and buy the new stock on behalf of Roxy
due to agency relationship. As per the estoppel and ratification principal, it is apparent
authority in which it is supposed by the retail representative of Zala clothing that the Roxy
gave the authority to the Maggy to make a deal. This apparent authority is supposed to
present by retail representative of Zala clothing by making observation of the acts of Roxy
(Dal Pont, 2018).
Conclusion
As per the above analysis, it can be concluded that Roxy is legally liable to pay 55000
$ to Zala clothing. Roxy cannot denied to make the payment to Zala clothing. If Roxy denies
to make the payment to Zala clothing, then Zala clothing can sue Roxy.

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References
Amani, B. (2016). State agency and the patenting of life in international law: merchants and
missionaries in a global society. New York: Routledge.
Bogomolov, A., Streufert, J., & Knight, B. (2015). U.S. Patent Application No. 14/581,823.
Bogomolov, A., Streufert, J., & Knight, B. (2018). U.S. Patent Application No. 10/042,524.
Cohen, G. M. (2017). Law and Economics of Agency and Partnership. The Oxford Handbook
of Law and Economics, 2, 399.
Dal Pont, G. E. (2018). The Law of Agency. Oxford: Oxford University press
Duncan, W. D., & Christensen, S. (2016). Real Estate Agency Law in QLD. Canada:
Thomson Reuters.
McCarthy, K. (2017). Corporate Officer Liability and the Applicable Standard of Review
Under Delaware Law and Agency Law. Oxford: Oxford University press
Pont, G. (2018). The law of agency [Book Review]. Singapore Journal of Legal Studies,
(Mar/Sep 2018), 155.