Agency Relationships and Agent Duties

Agency Relationships

• Agent: A person who acts on behalf of another person (principal) to create a legal relationship with a third party.
• Principal: The person for whom the agent acts.
• Types of Agency Creation:
  • Agency by Estoppel: Principal's conduct leads a third party to believe an agency relationship exists.
  • Agency by Ratification: Principal approves an unauthorized act by an agent.
  • Agency by Agreement: Formal agreement between the parties.
  • Agency by Necessity: Agent acts to prevent loss or damage to the principal's property.

Agent's Duties

• Duty to Perform Personally: Agents must personally perform their duties, except in some circumstances, like need to delegate due to work type, express/implied permission, or emergency situation where total loss is prevented.
• Duty of Loyalty and Obedience: Agents cannot depart from instructions. Vague, professionally-relevant instructions should be followed accordingly. Exceptions include explicitly stated exceptions.
• Duty of Care and Skill: Agents must perform to the level of their expertise or in accordance with professional practice-relevant standards.
• Duty to Act in the Interest of the Principal: Act in good faith and avoid acts of self-interest.
• Duty to Account: Agents must account for money or property received on behalf of the principal.

Delegating Duties

• Delegation Restrictions (Delegatus Non Possest Delegare): Generally, agents cannot delegate their duties.
• Exceptions to Delegation:
  • Emergency situations to prevent total loss.
  • Explicit or implied permission to delegate.
  • Nature of the agency requiring delegation.

Agent's Duty Limitations

• Illegality: Agents cannot perform duties that are illegal.
• Criminality: Agents cannot perform duties involving criminal activities.

Agreement Restrictions

• Mentally Incapacitated: A contract with a mentally incapacitated person is invalid.
• Minors: Contracts with minors need to be limited to what minors usually engage with.
• Bankrupts: Contracts with bankrupts are invalid.

Gratuitous Agents

• Gratuitous agent: An agent acting without receiving compensation.

Types of Agents

• General Agents: Handle a wide variety of transactions or tasks for their principal.
• Special Agents: Authorized to handle a single transaction or a limited set of tasks for their principal.
• Commission Agents: E.g., insurance agents, brokers - earn a commission on a contract.
• Brokers: Facilitate contracts between two or more parties.
• Mercantile Agents: Trade in goods or commodities on behalf of others.
• Del Credere Agents: Guarantee payment of debts. 
• Solicitors: Legal representatives.
• Estate agents: Responsible for buying and selling property.
• Auctioneers: Sell property at auctions.

Remedies for Agents

• Sue for damages and losses.
• Counter-claims.
• Hold off property (lien).
• Action for outstanding sums (fees).

Remedies for Principals

• Action in court for claims.
• Request for actions to be carried out.
• Damages.
• Dismissal of Agency Relationship.

Termination of Agency Relationship

• Operation of Law:
  • Performance of the agreement.
  • Death or insanity of the agent or principal.
  • Bankruptcy or winding up of the agency.
• Act of Parties:
  • Agreement between both parties.
  • Principal requesting the agent to leave.
  • Agent’s notice for termination.