What is an Agent?
An agent is someone who agrees to represent another person, called a principal. An agency relationship is usually formed by an agreement between the two parties. An agent can only act on behalf of a principal for certain issues (depending on the agreement).
What is a Principal?
A principal is somebody who agrees to have another person (an agent) act on his/her behalf in certain situations. The principal has the right to completely control the agent¿s conduct if it relates to the duties given to the agent by the principal.
What are the Duties of an Agent to the Principal?
An agent has several duties towards the principal. Failure to perform these duties can result in a breach of contract or tort liability. An agent¿s duties are very similar to that of an employee. An agent¿s duties include:- Loyalty ¿ An agent must act only for the benefit of the principal and should not act for personal gain. Also, any information regarding the agency relationship should be kept confidential.
- Performance ¿ Obviously, the agent must perform for the principal in an acceptable manner. This means that the agent should perform his/her duties with reasonable skill and responsibility.
- Notification ¿ This is also known as the duty to inform. An agent must inform the principal of all matters concerning the subject matter of the agency relationship. For example, a painter hires an agent to sell his paintings. If the agent learns that a buyer will be unable to pay, the agent must inform the principal of this fact.
- Obedience ¿ An agent must act as the principal instructs and should not act without the principal¿s permission. One exception is if a principal asks the agent to violate the law, the agent can refuse without breaching this duty. Another exception is that an agent can deviate from a principal¿s instructions during emergency situations.
What are the Duties of a Principal to an Agent?
A principal has duties towards his/her agent. Failure to perform these duties can result in a breach of contract or tort liability. A principal¿s duties are very similar to that of an employer. A principal¿s duties include:- Compensation ¿ Since a principal hires an agent, the agent expects payment to be made in a reasonable manner. The situation and the arrangement made between the parties will determine what is ¿reasonable.¿ A principal must also pay any out-of-pocket expenses that an agent incurs while performing duties for the principal.
- Cooperation ¿ A principal must allow an agent to perform his duties. This being the case, a principal must cooperate with and assist an agent.
- Safe Working Conditions ¿ A principal must provide an agent with safe working conditions. For example, the principal needs to warn an agent about unsafe situations when performing certain duties.
How Can an Attorney Help Me?
An agency relationship is similar to an employer-employee relationship. An experienced employment lawyer can assist you in issues dealing with agency law. For example, an employment lawyer can help you draft an agency agreement or inform you if any parties have violated their duties. |
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