Discuss the capacity to enter into an agency relationship

The legal relationship of agency | Brisbane Lawyers | Dundas Lawyers

discuss the capacity to enter into an agency relationship

What is an Agency Relationship? relationship and the principal must have the necessary legal capacity (must be of Agency relationships in workplace settings may or may not exist. Independent contractors are workers engaged in a particular business, profession or trade who enter contracts with the. “involving authority or capacity in one person (the agent) to create or affect legal for example, entering into an agreement with a third party on behalf of the It is discussed above how the Agent can create legal obligations. Agency relationships always involve an agent and a principal, though the agency relationship can arise in various ways. This lesson explains.

In this instance, the hirer cannot send a representative. In an agency relationship, the capacity that is essential is the capacity of the principal and not that of the agent.

discuss the capacity to enter into an agency relationship

As a result, a person who lacks capacity — such as an infant — could act as an agent for a person who has capacity. This is due to the fact that it is the principal would bear responsibility for the actions and decisions reached by the agent.

Agency Relationships In The Workplace - San Jose Business Lawyers Blog - October 28,

Conversely, a person who lacks capacity cannot appoint a person who possesses capacity to act as his agent unless it is an action that he can normally undertake — like the purchase of necessaries in the case of an infant.

White City Stadium Ltd [1]. Also, a corporation cannot appoint an agent in the case of an issue which is ultra vires its memorandum of association. This is due to the fact that it lacks the capacity to do the act itself. See Re Jon Beauforte Ch.

Principal-Agent Relationship

The same thing goes for an unincorporated association. The Form for a Contract of Agency There is no specific prescribed form for the appointment of an agent.

It could either be oral, in writing or implied from the circumstances of the case. A contract of agency can be oral even though the contract which the agency seeks to execute is one that is required by law to be in writing. An exception to this is a situation in which the agent is expected to execute a document via a deed.

discuss the capacity to enter into an agency relationship

In this instance, the agent must also be appointed via a deed. This rule is known as the power of attorney. There are also instances in which statutes specifically prescribe that a contract of agency must be evidenced in writing.

discuss the capacity to enter into an agency relationship

An example is in the provision of S. Modes for Creating an Agency Relationship The modes for creating an agency relationship can be broadly classified into direct and indirect modes. Direct Modes for the Creation of an Agency Relationship Direct modes are those modes in which both parties consciously agree to the formation of the agency relationship. Under this mode we have: As stated above, there are some situations in which the law requires that the appointment of an agent be in writing.

Any agency contract in contravention of these provisions of law would be deemed ineffective. Farhat [3]an agent was appointed on verbal authority to sign a deed. Oral agreements are those in which the principal appoints the agent by word of mouth. However, it is advised that agency relationships should be outlined in writing. The reason for this is due to the fact that a written agreement would expressly state the duty and obligations of the various parties.

discuss the capacity to enter into an agency relationship

These will by their nature vary between circumstances, but common obligations of Principals include: Rights and obligations of the Agent The relationship between an Agent and their Principal is, much like that between a solicitor and their client, a fiduciary relationship.

In the agency relationship, the Agent owes a fiduciary duty to the Principal, which compels the Agent to act only in the best interests of the Principal. The fiduciary duty prevents the Agent from acting in a manner that: Outside of the fiduciary duty an Agent owes their Principal, an Agent also has other duties, including by not limited to: Liability for actions of the Agent The appointment of an Agent is a serious decision that carries great risk for the Principal.

The major source of risk arises due to the liability for actions committed by the Agent that are within the scope of their authority. It is discussed above how the Agent can create legal obligations between the Principal and third parties that are enforceable by such third parties against the Agent.

For this reason, it is important that the authority of Agents is clearly defined, and strictly regulated, so as to avoid any liability for actions of the Agent that are outside that which was contemplated initially.

Disclosure Regarding Real Estate Agency Relationship

Liability for the actions on the agent in tort The Principles liability for the actions of their Agent is not limited to commercial dealings and it extends to torts committed by the Agent against third parties when the Agent is acting within the scope of their authority.