agency Flashcards
what is an agent?
person authorised to act as a representative of another person
what is a principal?
the person who employs another person (agent) to act on their behalf
what are the three general duties of a principal?
- pay agent wages / commission
- pay agent expenses & cover costs (as agreed per contract between them)
- vicarious liability (agent could be held responsible for principals actions)
what are the eight general duties of an agent?
- perform agreed tasks / follow instructions
- should be personal performance, don’t delegate to someone else (unless agreed or unforeseen circumstances)
- reasonable care & skill
- confidentiality (keep info private even after P&A rs terminated)
- full disclosure to principal (tell them EVERYTHING)
- avoid conflicts of interest (inform P if there is potential CoI)
- must not make secret profits (can’t use info to make gain)
- must not take / make bribes
what are the three types of agency?
- actual authority
- necessary
- apparent authority
what is necessary authority in terms of an agent?
deals with emergencies.
- agent must be in control of principals property when emergency arises
- agent has to protect principals interest
- must be impossible for agency to get instructions from principal (eg. principal in a coma)
- agent must act in good faith & principals best interests
what are the five reasons to end an agency principal relationship?
- performance (task completed so longer needed)
- agreement (mutual agreement to end rs as no longer need each other)
- breach (breach of agreement could result in termination)
- frustration (ending rs due to events out of control eg. death, insanity?)
- withdrawal of authority by principal (lack of trust, CoI issues. principal has to inform everyone about termination of rs)
what is a lasting power of attorney?
when the principal is incapable of control so requires an agent to act on their behalf eg. progressive illness causing lack of mental capacity
