Question

BUSINESS LAW

Contracts and Bankruptcy.

2. Tell me the ways that agency agreements can be formed and tell me what ratification means.  

3.   Tell me 4 or 5 duties that agents owe their principals, and then 3 or 4 duties that principals owe their agents.    Explain at least 3 of them.

4.   Tell me the types of authority that agents have in typical agency relationships.   Explain one of them.

Answer 1

2. Agency agreement is an agreement in which a principle appoints a person as an agent to act for him instead. According to the contract Act 1950, Agency agreements can be formed by 5 different ways. The different ways are:

1. Implied appointment by the principal: In this the contract agency is created in an implied way.

2. Expressed appointment by the principal: In this the contract of agency is created by an expressed or explicit way.

3. Ratification by the principal: In this the contract of agency is created insccurately by the agent without the principal knowing.

4. By Necessity: The contract of agency arises out of necessity.

5. By doctrine of Holding out: The contract of agency arises where the agents steps in to be a part and act like an agent.

Ratification in the contract of agency means a situation where any person or company inaccurately tries to claim to be an agent for the another company or the person and conducts anything in capacity of them but the principal (who actually isn't the principal) later recognises and accepts.

2. Duties of agents towards their principals:

1. the agent shall act within the scope of the authority: The first duty of the agent is to act within the scope provided to him/her by the principal client. One shouldn't act more or less with the authority and the scope provided for work.

2. he shall work with skills and diligence: Another duty of the agent is to act in a very deligent and skillful manner. He would be skilled at his work and would have effective expertise as well.

3. revealing all the important information: At last, the agent has the moral duty of revealing every kind of information related within the scope of work or the work that he has performed in this act. He should be liable to telling all the important information to his client.

Duties of principals towards their agents:

1. Compensation: The first duty of the principal is to grant the compensation to the agent for which he/she is being working.

2. Reimburse: The second duty of the principal is to take the charge of all the extra expenses and the payments made by the agent in your name and should complete all the dues before ending the contract.

3. Indemnify: At last, all the liabilities which are held against the agent during this course of time should be well taken care of by the principal.

3. The different types of authority arising out of this contract of agency are Expressed authority, Apparent authority, Implied authority and Inherent authority.

Explaining one of them would be the Express Authority. In this, the client would expressly states the type of authority provided for the agent in the written contract. For example, the client would sign and make the agent even sign the contract which would specify all the relevant information regarding this contract.