Commercial Law

COMMERCIAL LAW

PART A.

Introduction

The law of agency is comprised of dealing in commercial law with a group of quasi-contractual, contractual and non-contractual relationships which involves people who are known as agents. These agents are given the authority of acting on behalf of someone else, which is called the principal, in the creation of a legal relation with a third party (Gregory, W. A. 2001). The relationship is known to be fiduciary in nature. An agency may be formed when an employer wants to be at more than a single place. Under such circumstances, the agent is authorized with the powers of the employer to take decisions on his behalf. This is what leads to the formation of an agency. The agent has some responsibilities and duties towards the principal. This includes the duty of the undertaking of the tasks mentioned by the terms of the agency. An agent is strictly forbidden to take any action not authorized by the principal. The agent is liable of carrying out its duties with diligence and care. It is commonly known that agents ensure in the avoidance of interest conflict between the interest of the agent itself and the interest of the principal (Hynes, J. D. 2001). With the consent of the principal, an agent can serve more than a single principal. For these services, agents are provided commissions or fees by the principal.

Advantages and Disadvantages

The agency relationship allows an individual in the delegation of authority to another individual or party. This is famously said to allow an individual to be present at two places at the same time. There are various pros and cons for different kinds of agency. For example the pros and cons of a hiring agency would be:

Through agencies, hiring people would be very efficient and effective. It would save ample time of the principal. The details of the required qualifications and experiences would be provided to the agency. The agency would then identify the candidates matching the requirements of the principal. Each interviewee's background as well as references would have been checked in advance. Thus, no advertising or time investment would be required by the principal.

The established and recognized agencies provide the principals with the facility of temporarily hiring the employee. Thus, the employee would not be directly hired by the principal. It would remain an employee of the agency for some period. This allows the principal to analyze the ...