Agency Arrangements An agency relationship exists where one person (or company) has authority to bind another person (or company) legally, either generally or in relation to certain matters. The agent is the person with authority to undertake legally binding acts on behalf of another. The person who is legally bound by the agent, and on whose behalf the agent acts […]
Rights and Obligations The terms of appointment should specify the agent’s authority, remuneration, rights and duties. The duties and obligations of the agent are implied by the general law in the absence of contractual provision for them. The default duties and obligations may be varied, modified or set out in more detail by the terms of the contract of appointment. There […]
Nature of Agency Agency arises where a person has authority to act on behalf of another. The key characteristic of agency is the ability of the agent to enter obligations, most commonly contracts, which are binding on his principal. Equally, the principal may enforce legally significant acts, such as contracts, entered by his agent on his behalf with a third-party. […]
Source of Authority I An agent may obtain his power and authority in a number of ways. Actual authority arises when the principal gives the agent powers in writing or verbally to bind him in relation to particular matters. The authority may be on such terms as may be provided. It may cover a certain type of transaction or matter, […]
Liability of Agent In a clear case of agency, the agent is not liable on the contract, and the principal is liable. Equally, the agent cannot enforce the contract on his own behalf. The principal may enforce the contract and the third party may enforce it against him. Where an agent concludes a contract within the scope of his apparent authority, then […]
Liability of Principal The principal is party to and is bound by contracts made by his agent with a third party, within the scope of his express or implied authority. The third party can enforce the contract directly against the principal and vice versa. Where an agent concludes a contract within the scope of his apparent authority, then the third party can […]
Contract and Agency Most agency relationships are based on a contract or on another consensual basis. The contract may be terminable by notice in accordance with its terms. In defined cases of serious breach, there may be a right to terminate the contract without notice. The agency and the authority that it imports (as distinct from the contract which may govern the parties’ […]
Remuneration An agent may or may not receive payment for his role. An agent appointed by contract is usually entitled to payment by its terms. The agent’s remuneration may be by way of commission or by fixed or recurrent payments. The duties and liabilities of agents apply, regardless of payment and the permanence of the role. The same broad principles […]