What Is a Agency in Contract Law

An agent is a person who acts on behalf of and on behalf of others after receiving and accepting a certain degree of authority to do so. Most organized human activities – and virtually all commercial activities – are carried out through agencies. No business would be possible without such a concept, not even in theory. For example, we could say, “General Motors builds cars in China,” but we can`t shake hands with General Motors. “The general,” as they say, exists and functions through agents. Similarly, partnerships and other commercial organizations rely heavily on agents to manage their activities. In fact, it is no exaggeration to say that the ability to act is the cornerstone of the organization of companies. In a partnership, each partner is a general representative, while under corporate law, officers and all employees are representatives of the company. Suppose Arthur is Paul`s agent, who is employed until October 31. On November 1, Arthur buys materials from Lumber Yard – as he has done since early spring – and debits Paul`s account. Lumber Yard, who doesn`t know that Arthur`s job ended the day before, bills Paul. Will Paul have to pay? Yes, because the termination of the agency was not communicated to Lumber Yard.

It seemed that Arthur was an authorized representative. This issue is addressed in Chapter 12 “Liability of the procuring entity and the representative; Termination of the Agency”. Enforcement agents are liable to third parties for illegal acts or injustices committed in the course of their activities. Most agencies are under contract, but the agency can also arise implicitly or apparently. However, the existence of agents does not require an entirely new law on tortious or contractual liability. An offence is no less harmful when committed by an officer; A contract is no less binding when it is negotiated by an agent. What needs to be taken into account, however, is how an agent acts on behalf of his or her principal and vis-à-vis a third party. Even though the agency contract does not need to be in writing, the contracts that agents enter into with third parties often have to be in writing.

Thus, Article 2-201 of the Unified Commercial Code expressly requires that contracts for the sale of goods at a price of five hundred dollars or more be concluded in writing and “signed by the party against whom performance is to be obtained or by his authorized representative”. A special agent is a person who is authorized to negotiate only in a specially appointed forum or in a series of specially designated transactions. For example, a real estate agent is usually a special agent who is hired to find a buyer for the client`s country. Suppose Sam, the seller, hires an Alberta agent to find a buyer for his property. Alberta`s commission depends on the selling price which, as Sam notes in a letter she sent, “certainly cannot be less than $150,000.” If Alberta finds a buyer, Bob, who agrees to buy the property for $160,000, signing him under the purchase agreement will not bind Sam. As a special agent, Alberta had only the power to find a buyer; She did not have the authority to sign the contract. If the Agent has a real or obvious power of attorney, the Agent will not be liable for actions taken under that authority as long as the Agency`s relationship and the Client`s identity have been disclosed. However, if the agency is not or partially disclosed, the agent and client are liable. If the client is not bound because he does not have an actual or obvious power of attorney, the alleged vicarious agent is liable to the third party for the breach of the implied warranty of authorization. The rights of agents vis-à-vis third parties in contracts are as follows: The internal agency relationship can be terminated by agreement. Under sections 201 to 210 of the Indian Contract Act of 1872, an organization can terminate in several ways: An agency relationship is a fiduciary relationship in which a person (the so-called “principal”) allows an agent to act on its behalf.

The agent is under the control of the client and must accept his instructions. [2]. Classic examples of agency relationships are the employer/employee, lawyer/client, and company/manager. [3] Let`s analyze this sequence of events from a legal perspective – recognizing, of course, that this example is an analogy and that even today the law would not impose any consequences on Alden if he did not meet Captain Standish`s wishes. Alden was the captain`s agent: he was expressly authorized to speak on his behalf in an agreed manner, for a specific purpose, and he accepted the mission taking into account the captain`s friendship. However, he was in a conflict of interest. He tried to carry out the order, but he did not live up to expectations. Eventually, he ended up with the price itself.

Here are some questions to consider, the same questions that will come up throughout the agency`s discussion: agents are accountable to third parties; First of all, on its contract: the Agency can be dissolved by the act of one of the parties. First, it can normally be provided that the principal has the right to revoke the powers conferred by him; However, there are a few exceptions, including the following examples. if the client has expressly stipulated that the power of attorney is irrevocable and that the representative has an interest in its execution; However, it should be noted that although there may be an explicit agreement, not to be revoked if the agent has no interest in its execution and there is no consideration for the agreement, it is considered a naked pact and authority can be revoked. 1. Duty of loyalty: An enforcement agent owes his client a general duty of loyalty. This means that the agent must subordinate his interests to those of the client if they fall within the agency relationship. An example of a breach of this obligation occurred when an employee responsible for determining bids for construction projects worked for another construction company as an independent contractor performing the same type of work. The employee did not communicate this to his current employer and in fact submitted offers for both companies for the same jobs. After a lawsuit, the trial judge found that the employee had breached his duty of loyalty. [8] Authority based on a position held to deter fraud and other harms that persons dealing with agents may encounter, there is a concept of power inherent in the agency, that is, the power derived solely from the agency relationship.

[8] For example, partners obviously have the power to bind the other partners in the company, their liability being joint and several (see below), and in a company, all officers and officers with decision-making power have a clear power to bind the company because of their stated position. In 1986, the European Communities adopted Directive 86/653/EEC on self-employed commercial agents. In the United Kingdom, this has been transposed into national law in the Commercial Agents Regulations 1993. [12] Thus, agents and principals in a commercial agent relationship are subject to both the common law and the Commercial Agents Regulations. The Agency is revoked by the expiration of the Agency`s purpose or the Client`s authority over it or by the full execution of the Trust. In addition to determining an employee`s status for tax and indemnity insurance purposes, it is sometimes crucial for liability insurance decisions, which generally exclude accidents involving the insured`s employees from coverage. General Accident Fire & Life Assurance Corp v Pro Golf AssociationGénéral Accident Fire & Life Assurance Corp v Pro Golf Association, 352 N.E.2d 441 (Ill. App. 1976). The insurance policy in question covered members of the Professional Golfers` Association. Gerald Hall, a golf professional employed by the local parking service, was insured under the policy, which excluded “bodily injury to any employee of the insured resulting from and in the course of his employment by the insured.” That is, no Hall employee would be insured (rather, such a person would have coverage under the Workers` Compensation Acts).

Thirteen-year-old Bradley Martin was on the golf course playing in the junior league. At Hall`s request, he agreed to retrieve golf balls or “shagen” to be beaten during a lesson Rever gave; He should be compensated, as Hall put it, “either by golf instructions, or by money, or by hot dogs or anything else.” During the lesson, a golf ball hit by Hall hit young Martin in the eye. If Martin were an employee, the insurance company would be liable; If he were not an employee, the insurance company would not be liable. The trial court found that he was not an employee. The evidence showed that sometimes boys who “shook” balls were paid, golf instructions or food were given, so the issue of compensation was ambiguous. Martin was not instructed on how to perform (the admittedly simple task) of retrieving golf balls, no control was exercised over him, and no equipment other than a bag was needed to collect the balls: “We think the evidence is subject to various conclusions. We cannot say that the decision of the trial court violates the obvious weight of the evidence. 1. An actual power of attorney exists if the authorized representative is acting on behalf of the client and reasonably assumes that the client wants this action. [4] Actual authority includes “explicit” authority, where the principal tells the officer exactly what to do, and “implied” authority, where the officer takes steps reasonably necessary to achieve the agency`s objective. [5] Contracting entities may also limit the powers of agents or revoke them at will.

For example, a client who initially hired an agent to purchase a property may change the instructions to limit the agent`s power to rent the property. [6] The mutual rights and responsibilities between a contractor and a representative reflect economic and legal realities […].