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Paper Topic:

Business Law Week 5 Assignment

Business Law Week 5 Assignment (Your Name (Your University

2007

Business Law Week 5 Assignment

1 . Define and discuss the agency relationship and distinguish it from other professional relationships

Agency is defined as an agreement , express , or implied , by which one of the parties , called the principal , confides to the other denominated the agent , the management of some business to be transacted in his name , or on his account , and by which the agent assumes to do the business and to render an account of it (Lectric Law Library Legal

Lexicon , n .d . In simple terms , two parties agree that one of them represent the other , i .e . principal and the agent . Both of them agree that the agent will represent the principal in a business transaction

The difference between agency and other professional relationships such as those in corporations and partnerships is that an agency is consensual and may be orally commenced . On the other hand , partnerships and corporations are organized in accordance with the provisions of law and therefore formalistic and must follow statutory procedures (wisconsinba .org , n .d

2 . Discuss in detail the several ways in which an agency relationship is created

Agency is created either expressly or impliedly . There is an express creation of an agency either in writing or orally . Most often an agreement of agency is reduced into a contract and is accepted also formally by the agent . On the other hand , an implied agency is created by virtue of acts or deeds inferred from the relation of the parties and the nature of the employment without any proof of any express appointment (Lectric Law Library Legal Lexicon , n .d . The agency may be given before the performance of the act by the agent or it may be ratified and adopted thereafter

3 . Discuss in detail the duties and liabilities of principals and agents

The agent 's duties towards the principal are : to comply strictly with the terms of the agreement and perform the task for which he was commissioned . He should not accept other duties with other principals which duties may be considered inconsistent , conflicting , or contradictory to one of the principals . The agent also has the duty not to profit personally from the transactions he enters into in behalf of the principal . The agent is also duty bound to render an accounting Clearly and generally , the agent has a fiduciary duty of loyalty to his principal . The principal on the other hand , must disclose all pertinent information relative to the transactions for which the agent is authorized to enter into and must also pay the agent his fee or commission (Answers .com , n .d

The principal is liable to third parties if the agent entered into a transaction with actual or apparent authority and acted within the scope of that authority . The agent is not liable unless he fails to disclose the fact of agency and the identity of the principal (Answers .com , n .d . Should the agency be undisclosed or partially...

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