Liability of Boutique Owner in Agency Law

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