Agency Relationship
AGENCY RELATIONSHIP
An agency is a relationship which exists when one party called the principle appoints and authorizes another called the agent to enter into a contract with a third party , which contract is legally binding to both parties.
An agent is therefore a party who is authorized to represent or act on behalf of another for the purpose of bringing that other party into legal relations with a third party.
A Principal is a party who authorizes another party to represent or act on his behalf so as to bring him into legal relations with a third party.
And a contract is a legally binding agreement that imposes obligations on one or more parties to do or abstain from performing certain acts.
In other wards, an agency relationship is where one man may represent or act on behalf of another, with other’s authority for the purpose of bringing him into legal relations with a third party.
An agency relationship is governed by the law of agency which is that part of commercial law dealing with a set of contractual, quasi-contractual, and non-contractual relationships between a principal and an agent whereby no party can enter into a contract through an agent which is outside the principles contractual capacity.
An agency comes into existence due to a number of circumstances and they are basically five, as explained below;
By an actual authority to contract given by the principal to the agent. In this case, the principal authorizes the agent to enter into contract on his behalf. this authority may be express or implied. In instances of implied authority, an agent has an obligation to act reasonably for the interests of his principle. Even if that obligation was not included in the terms of his agency with the principal, he is expected to do his act as the usual in that particular trade or business, or ordinarily incidental to the due performance of the duties.
The authority to an agent may be express, enabling the agent to bind the principal by the acts
An agency is a relationship which exists when one party called the principle appoints and authorizes another called the agent to enter into a contract with a third party , which contract is legally binding to both parties.
An agent is therefore a party who is authorized to represent or act on behalf of another for the purpose of bringing that other party into legal relations with a third party.
A Principal is a party who authorizes another party to represent or act on his behalf so as to bring him into legal relations with a third party.
And a contract is a legally binding agreement that imposes obligations on one or more parties to do or abstain from performing certain acts.
In other wards, an agency relationship is where one man may represent or act on behalf of another, with other’s authority for the purpose of bringing him into legal relations with a third party.
An agency relationship is governed by the law of agency which is that part of commercial law dealing with a set of contractual, quasi-contractual, and non-contractual relationships between a principal and an agent whereby no party can enter into a contract through an agent which is outside the principles contractual capacity.
An agency comes into existence due to a number of circumstances and they are basically five, as explained below;
By an actual authority to contract given by the principal to the agent. In this case, the principal authorizes the agent to enter into contract on his behalf. this authority may be express or implied. In instances of implied authority, an agent has an obligation to act reasonably for the interests of his principle. Even if that obligation was not included in the terms of his agency with the principal, he is expected to do his act as the usual in that particular trade or business, or ordinarily incidental to the due performance of the duties.
The authority to an agent may be express, enabling the agent to bind the principal by the acts
References: i. Anson’s law of contract, 26th edition.(pg 529 -567) ii. Bowsted, Agency (14th edition) iii. The internet iv. Powell, The Law of Agency (2nd edition) v. Fridman, The Law Of Agency (5th edition)