The principal-agent relationship is an agreement by which one company legally entrusts another to act on its behalf. In a primary representation relationship, the representative acts on behalf of the client and should not have a conflict of interest in the performance of the act. The relationship between the principal and the agent is called the „agency,“ and the agency`s law establishes guidelines for such a relationship. Most agencies are under contract. Thus, the general rules of contract law set out in Chapter 8 „Contracts“ govern the law of the Agency. However, agencies can also be created without a contract, by arrangement. Therefore, three principles of the contract are particularly important: the first is the requirement of consideration, the second the written and the third concerns contractual capacity. „First, commercial agents and constituents must work together to fulfill their agreement to express honesty and openness. Good faith behavior requires each party to take proactive steps to help the other implement its agreement, instead of simply refraining from obstructionist behavior. However, whether a party has acted in good faith cannot be determined by reference to a moral or metaphysical concept of cooperation; that assessment must be based on an objective assessment of the actual relationship between commercial agents. As a result, the intensity of the required cooperation varies depending on the terms of the contract and relevant business practices. As these questions suggest, agency law often involves three parties – the principal, the agent and a third party.

There are therefore three different relationships: between customer and representative, between customer and third party, and between representative and third party. These relationships can be summarized in a simple diagram (see Figure 11.1 „Agency Relationships“). If a person is injured by a van, under agency law, the injured person can hold the truck driver`s employer responsible for the injuries, even if the employer was not directly responsible. This is because the driver and the employer are in a principal-agent relationship where the driver, who is the agent in this case, has the legal authority to act on behalf of the employer (i.e., the principal). 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. An agent whose reimbursement depends on maintaining the power to act as an agent has an agency associated with an interest if he has an interest in the business. A literary or author agent, for example, usually agrees to sell a literary work to a publisher in exchange for a percentage of all the money the author earns by selling the work. The documentation agent also acts as a collection agent to ensure that his commission is paid. By agreeing with the Client that the Agency is associated with an interest, the Agent may prevent the termination of its own rights in a particular literary work to its detriment.

The mutual rights and obligations between a client and an agent reflect economic and legal circumstances. A business owner often relies on an employee or other person to run a business. Since, in the case of a company, a company can only act through natural persons, the customer is bound by the contract concluded by the representative as long as the representative acts within the framework of the agency. An agency is established when the customer appoints a person as an agent on the basis of a contract or asks someone to make a delivery. This means that the customer is responsible for all the agent`s actions, while the agent`s actions correspond to those of the customer. This type of agency is usually enforced through a written agreement created by the power of attorney. In Watteau v. Fenwick,[6] Chief Justice Lord Coleridge accepted a statement at Queen`s Bench by Justice Wills that a third party could personally hold a principal he knew liable when selling cigars to an agent acting outside his powers. Judge Wills noted that „the principal is responsible for all actions of the agent that fall under the authority normally entrusted to an agent of that type, regardless of the restrictions imposed between the principal and the agent imposed on that authority.“ This decision is strongly criticised and questioned[7], although it is not completely repealed in the United Kingdom. It is sometimes called „habitual authority“ (but not in the sense used by Lord Denning MR in Hely-Hutchinson, where it is synonymous with „implicit real authority“).

It has been explained as a form of apparent authority or „inherent agency power.“ Second, commercial agents and contractors should not exploit asymmetries in their agency relationship in a way that runs counter to the legitimate expectations of the other party. In this context, the question is whether conduct violates the obligation of overall assessment, taking into account all aspects of the relationship; Key facts include the contractual and commercial leverage of each party, its objective intentions enshrined in the contract and the business practices of the sector concerned. Nevertheless, the initial axiom of this study must be that these are business relationships in which professionals are supposed to be self-employed and free to pursue their own interests. Basically, it will not be an estimate aimed at achieving ontological fairness, a good deal or a balance between giving and receiving sales representatives and constituents. [14] The definition of agency law deals with the agent-principal relationship and it is a relationship in which one party has the legal authority to act in place of another.3 min read If an agency relationship exists, the client is also liable for any violation that the agent inflicts on other parties. These may include violations of a third party`s financial interests, emotional injury, or physical injury. An agent is someone who acts on behalf of another. Many transactions are made by agents who act in this way. All corporate transactions, including those involving government organizations, are carried out in this way because the companies themselves cannot actually act; they are legal fictions.

Agencies can be created explicitly, implicitly or apparently. Recurring issues in agency law include whether the „agent“ is really one, the extent of the agent`s powers, and the obligations between the parties. The five types of agents include: general agent, special agent, sub-agent, agency associated with an interest and servant (or employee). The independent contractor is not an employee; Their activities are not specifically controlled by their client, and the client is not liable for social security, social security and other charges. But it`s not uncommon for an employer to claim that employees are independent contractors when in fact they are employees, and cases are often hard-won for the facts. Agency. Law of the agency Creation of the agency Express registration contract or contract of agency buyer Implicit remuneration of the agency The source of the remuneration. The principal agent relationship may be entered into by all parties willing and able for the purposes of a legal transaction. In simple cases, the principal within the relationship is a single person who hires an agent to perform a task; However, other relationships under this guise have a client which is a corporation, non-profit organization, government agency or partnership. The Agency must be adopted retrospectively or appointed in advance. In the first case, there must be tolerance on the part of the agent (the recognition of which can be quite implicit) or explicit recognition. An agent is a person who acts on behalf of and on behalf of others after receiving a certain level of authority and being expected to do so.

Most organized human activities – and virtually all commercial activities – are carried out through agencies. No business would be possible, even in theory, without such a concept. 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 agency is the cornerstone of the organization of the company. In a partnership, each partner is a general representative, whereas under corporate law, officers and all employees are representatives of the corporation. .