Agency

Types of Agency

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. … Read the rest

Termination

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.… Read the rest

Principal & Third Party

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.… Read the rest

Liability and Delegation

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.… Read the rest

Financial Aspects

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.… Read the rest

Express Authority

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.… Read the rest

Deemed Authority

Source of Authority 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.… Read the rest

Agent’s Duties

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.… Read the rest