Roles and Duties of Agents in Business Law
Added on 2020-01-23
10 Pages3930 Words155 Views
THELAWOFAGENCY1
Table of ContentsAgency (Generalized overview with case examples)...........................................................................3Types of agents.....................................................................................................................................4Roles and Duties of Agents in business law.........................................................................................5Principal – Agent Relationship.............................................................................................................7Agency created by agreement .........................................................................................................7Agency created by the operation of Law.........................................................................................8References............................................................................................................................................92
AGENCY (GENERALIZEDOVERVIEWWITHCASEEXAMPLES)The law of agency is an area of commercial law that deals with varied set of contractual,quasi- contractual and non- contractual fiduciary relationships and it also involves a person calledagent. Agent is entitled to act on the behalf of principal entity because he is legally entitled to createrelations with a third party on the behalf of principal. Agent is also required to negotiate on thebehalf of principal and he can also bring third party into contractual relationship (Lewis and Selin,2015). The branch of law further separates as well as regulates the relationship between agents andprincipals. Hence, from the discussion, it is clear that agency is a consensual relationship created bythe contract or by the law where in varied parties can work together to deal with the third party.Agency relationship is fiduciary in nature and the actions as well as words of the agent can bind theprincipal with the purpose of agency. Hence, under the law of agency, employer is responsible for the acts of employees evenwhen the employer is directly not entitled in the actions. Employer is responsible for the acts ofemployee because there exists direct relationship of principal and agent; thus it depicts all therequisites under which employer can be held liable. Therefore, agency English law is a significantUK commercial law and it forms a core set of rules that are necessary for consistent businessmanagement. There are two types of authority recognized in the law such as actual authority andapparent authority. In actual authority, the principal may have expressly conferred authority on theagent; hence this authority can be termed as implied authority (Latimer and Maume, 2015). Herein,authority also arises by consensual agreement and as an agent; the person is entitled to indemnityfrom the principal if he has acted within the scope of the actual authority. This may be applied in thecase of breach of contract where in liability to the third party can be expressed as per the impliedwarranty of authority. Ireland v Livingstone (1872) LR 5 HL 395 is the real example of expressactual authority. Furthermore, apparent authority exists when the principal has given the authority to theagent to act with the third party. This states that principal has authorized the agent to act on hisbehalf and things can be ordinarily entrusted to one occupying such position. If the principal createsany kind of impression regarding authority of an agent without having any actual authority, then thethird party can be protected for so long because of the reasonable action (Singleton, 2015). This isalso termed as “agency by estoppel” or “doctrine of holding out” where in the principal will beestopped from denying the authority delegation, if third party has changed their position to theirdetriment in reliance on the presentations made. Freeman & Lockyer v Buckhurst Park Properties Ltd [1964] 2 QB 480 is the real example ofthis aspect and which is also registered in UK company law. In this case, Mr Freeman and Mr3
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