Agency Law Overview

A legal agreement where one person (the agent) acts on behalf of another (the principal).

The principal authorizes the agent through a contract. The agent follows the principal's instructions and is compensated for services.

The person who delegates authority to another to act on their behalf. They're responsible for the agent's actions.

The person authorized to act on behalf of the principal. They are responsible for carrying out the principal's instructions.

Allows skilled agents to negotiate on behalf of the principal. Handles situations when the principal lacks time or expertise. Facilitates actions when the principal is away. Sometimes required by law for legal accountability.

Both the principal and agent must be over the age of 21 and mentally sound.

When an agent acts outside the scope of their authority, the principal is still responsible for the agent's actions that caused harm or damage. Example: Agent makes a contract without authorization.

An agent is entitled to a commission if they successfully complete the task for which they were hired. However, they cannot claim a commission if they disobey the principal's instructions.

The agent has a legal right to retain possession of the principal's property until debts are settled. This right is like a temporary hold on the property to ensure payment.

The agent has a legal right to recover any expenses incurred due to the principal's actions, whether that's failing to provide proper instructions or interfering with the agent's duties.

In this type of agency, the principal's identity is known to the third party. The agent acts on behalf of the principal, making it clear they are not acting for themselves.

When the agent's actions are negligent or exceed their authority, the principal has the right to demand compensation for any resulting losses.

This occurs when the agent acts for and on behalf of the principal, but the principal's identity isn't revealed to the third party.

A situation where the agent doesn't reveal to the third party that they're acting on behalf of a principal.

If a third party discovers the existence of the principal before going to court, they can choose to sue either the agent or the principal.

Both the principal and the agent agree to end the agency relationship.

When the principal notifies both the agent and the third party of the agency's termination, the agent is responsible for any subsequent actions.

A type of agency that cannot be terminated by the principal because the agent has a vested interest in the agency, such as seeking compensation before the agency is established.

The termination of an agency relationship due to events beyond the control of the parties involved.

An agreement where ownership of goods is transferred from a seller to a buyer in exchange for money.

These include movable items like cars, clothes, and furniture.

Items attached to land, like trees, crude oil, and minerals become the property of the buyer only after they are severed from the land.

A deposit shows the buyer's commitment to purchase and incentivizes the seller to keep the property unavailable to others.

The buyer loses the deposit as compensation for the seller's inconvenience.

The seller must return double the deposit to the buyer as a penalty for breaking the agreement.

FOB means the seller is responsible for loading the goods onto the buyer's ship. CIF means the seller is responsible for the goods and insurance until they reach the buyer's port.

The party responsible for paying the fixed monetary value on a bill of exchange.

A hire-purchase allows renting goods with the option to buy later, while a sale requires immediate ownership.

A negotiable instrument is a document promising a specific payment, either on demand or at a set date.

The person to whom the payment is made, named on the bill of exchange.

A bill of exchange is a written order to a person (drawee) demanding payment to another person (payee).

A method by which the payee transfers their right to the fixed financial value to a second payee by writing the second payee's name on the back of the bill, including the endorsement date and the first payee's signature.

Both the drawer and payee are considered sureties and are responsible for payment if the drawee refuses or delays payment.

A cheque is a negotiable instrument where one party orders a bank to transfer money to the account of another party.

A cheque marked with two parallel lines, indicating that its cash value must be deposited into the payee's bank account and cannot be cashed directly.

It is considered a crime under criminal law, and the drawer may face legal charges.

It is a legal instrument where one party (writer) promises in writing to pay a specific amount to another party (payee), either at a fixed date or on demand.