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19 Agency © Oxford University Press, 2007. All rights reserved.
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Transcript of 19 Agency © Oxford University Press, 2007. All rights reserved.
19Agency
© Oxford University Press, 2007. All rights reserved.
Agency
Learning Objectives:• Understand the different types of agency arrangements and be
able to distinguish agency from other relationships;• Explain how an agency relationship is created and the nature
of the agent’s authority;• Understand the relationships that arise in the context of
agency, namely: principal and agent; agent and third party and principal and third party;
• Describe the rights, duties and obligations of agent and principal;
• Explain how an agency relationship is terminated.
Agency cont ...Who is an Agent?
Definition of an Agent
• Authorised to act on behalf of a principal.
• Creates legal relations between the principal and the third party.
• Authorisation can be express or implied.
• Contractual & Fiduciary relationship.
Agency cont ...
Agent’s Duties & Obligations
• Duty to follow instructions;
• Duty to act with due skill and diligence;
• Duty to avoid conflicts of interest;
• Duty to account for monies received on behalf of the principal.
Agency cont…
Principal’s Duties & Obligations
• Duty to remunerate;
• Duty to reimburse and indemnify.
Authority of agents
An agents authority to act on behalf of the principal can be either :
• Actual or ostensible ( apparent)
• Express or implied
Agency cont ...There are various types of agency
arrangements recognized by the law. These include :
• Universal Agents;
• General Agents;
• Special Agents;
• Factor or Mercantile Agents;
• Del credere agents.
Agency cont ...
Agency relationships should be contrasted with other forms of contractual relationships including:-
• Employer-employee;
• Independent contractors.
Agency cont ...
Third Party LiabilityAn agent may be liable to a third party in the following
ways:-• Third party believes that they are contracting directly
with the agent and the agent has failed to disclose the existence of the principal (undisclosed principal);
• The agent has exceeded the scope of his/her authority (breach of authority);
• The agent commits a tort (tortious liability).
Agency cont ...
Termination of Agency ( p 368)
• Operation of Law (time, death, bankruptcy);• Mutual agreement between the agent and the
principal;• Renunciation of the agent’s authority;• Dismissal of the agent by the principal.