Perfomance Management
1. Relationship between agent and principal
The relationship between agent and principal is a contractual one, where the agent is able to make binding contracts between his principal and a third party (without the agent himself becoming a party)
An agent’s obligations are, among others:- a) To carry out the principal’s lawful instructions, b) To act in good faith and for principal’s benefit c) To act in agent’s personal capacity (no delegation) d) To act with reasonable care and skill, expected from the agent’s type of business e) Not to allow a conflict of interest f) Not to make secret profit etc.
An agency may be terminated by the following ways:- a) by mutual termination b) if there is any breach by the agent of his duties c) revocation by the principal (by notice to the agent) d) upon the death/insanity of the agent e) upon the principal’s bankruptcy f) if the contract of agency is frustrated (e.g. destruction of subject matter) g) at the expiry of agency agreement (if agent was appointed for a limited period) h) upon completion of agent’s task (e.g. a sales agent – upon reaching sales target)
Where an agent exceeds his authority, a principal may ratify/ authorise the agent’s actions at a later date subject to the following conditions:- * Agent must have named the principal and informed the third party as such at the time of contract, or * Principal had a contractual capacity at the date of contract and date of ratification (i.e. if principal is a company, company must have been incorporated at the time of agent’s contract), or * Principal had full knowledge of material facts at the time of transaction, or * Principal was prepared to ratify the agent’s actions in any event
2. Employee – Independent Contractor distinction
EMPLOYEE | INDEPENDENT CONTRACTOR | Contract OF ServiceContract of employment and fiduciary relationship between employer and employee (position of
The relationship between agent and principal is a contractual one, where the agent is able to make binding contracts between his principal and a third party (without the agent himself becoming a party)
An agent’s obligations are, among others:- a) To carry out the principal’s lawful instructions, b) To act in good faith and for principal’s benefit c) To act in agent’s personal capacity (no delegation) d) To act with reasonable care and skill, expected from the agent’s type of business e) Not to allow a conflict of interest f) Not to make secret profit etc.
An agency may be terminated by the following ways:- a) by mutual termination b) if there is any breach by the agent of his duties c) revocation by the principal (by notice to the agent) d) upon the death/insanity of the agent e) upon the principal’s bankruptcy f) if the contract of agency is frustrated (e.g. destruction of subject matter) g) at the expiry of agency agreement (if agent was appointed for a limited period) h) upon completion of agent’s task (e.g. a sales agent – upon reaching sales target)
Where an agent exceeds his authority, a principal may ratify/ authorise the agent’s actions at a later date subject to the following conditions:- * Agent must have named the principal and informed the third party as such at the time of contract, or * Principal had a contractual capacity at the date of contract and date of ratification (i.e. if principal is a company, company must have been incorporated at the time of agent’s contract), or * Principal had full knowledge of material facts at the time of transaction, or * Principal was prepared to ratify the agent’s actions in any event
2. Employee – Independent Contractor distinction
EMPLOYEE | INDEPENDENT CONTRACTOR | Contract OF ServiceContract of employment and fiduciary relationship between employer and employee (position of