Agency

Question 1

Briefly explain agents’ rights and obligations towards the principal

Answer 1

Rights of the agent

• Claim remuneration: get compensation for their work done, can be through a percentage of the profit or as a base salary.
• Be indemnified (ersatt) for all the expenses and costs incurred in the performance of the services
• Exercise a lien over the property of the principal: the agents can hold on to the property that belongs to the principal, until the principal has fulfilled their obligations towards the agent.
• Be placed in the conditions to perform by the principal

Obligations of the agent = Duties of the agent

• Perform in accordance with the instructions of the principal
• Exercise due care and skill: Perform in accordance to what is expected from someone in a specific position
• Carry out the activity personally
• Account for all money and other property received on the behalf of the principal
• To not permit a conflict of interest to arise: Always act in the best interest of the principal
• No secret profit or misuse of confidential information or business opportunities: The agents should not use his position to achieve a financial advantage

Question 1

How does the Consultancy Agreement regulate non-competition and how do these clauses work under such a contract?

Answer 1

The Consultancy Agreement regulates what the consultant “can” do in clause 7, meaning this is where non-competition is regulated. The Consultancy Agreement guarantees that the consultant is not involved in any competing business in the same industry as of the day the contract was signed, with an expectation of the businesses listed in exhibit B.

If the consultant decides they want to work for a competing business, they have to ask the company for approval. However, the company can’t stop the consultant from accepting the business, but if they say no and the consultant still chooses to accept the job, the business can terminate their contract.