1. Duty of loyalty: An enforcement agent owes his client a general duty of loyalty. This means that the agent must subordinate his interests to those of the client if they fall within the agency relationship. An example of a breach of this obligation occurred when an employee responsible for determining bids for construction projects worked for another construction company as an independent contractor performing the same type of work. The employee did not communicate this to his current employer and in fact submitted offers for both companies for the same jobs. After a lawsuit, the trial judge found that the employee had breached his duty of loyalty. [8] While the agency can often be terminated at will, the law generally requires that the party affected by the termination be notified. However, explicit notice to the agent that the agency has been revoked or to the client that the agency is terminated is not always necessary if the affected party knows or has reason to know the facts that led to such revocation or waiver. An agency created for a specific purpose, as well as an agency created by a power of attorney, is usually terminated once the specific purpose for which it was created has been fulfilled. Upon termination of the Agency, the Agent shall be free from any fiduciary duty to the Client arising from the Agency Relationship.
An agency can be created in two ways. They may be explicit, for example where one party gives another party the power to act orally or in writing. Or they may be implied, for example when a party acts in such a way that it is legal and just to hold them responsible for something another party does. Permanent powers of attorney are unique types of agency creations, and each state has specific laws that limit their scope and impact. They usually do not put an end to the lack of instruction of a competent manager, but are actually created to maintain existence even when the client becomes incompetent. Check out our article on this type of agency relationship in California. This has become a more difficult area because states are not consistent in terms of the nature of partnership. Some States opt for partnership as only a sum of the natural persons who have joined the company. Others treat the partnership as a business unit and give the company its own legal personality as a corporation. For example, in English law, a partner is the representative of the other partners, while in Scottish law “a [partnership] is a separate legal entity from the partners who compose it”[10] and therefore a partner is the agent of the partnership itself. This form of agency is inherent in partner status and does not result from an agency contract with a client.
[Citation needed] The United Kingdom`s Partnership Act 1890 (which includes both England and Scotland) provides that a partner acting within his or her actual powers (express or implied) binds the partnership if he or she does something in the normal course of carrying out his partnership activities. Even if this tacit authority has been revoked or limited, the partner has obvious authority unless the third party knows that the authority has been compromised. So if the partnership wants to limit a partner`s authority, it must explicitly inform the world of the restriction. However, there would be little difference in content if English law were changed:[11] The partners are binding on the partnership and not their co-partners individually. For this purpose, the knowledge of the interim partner is attributed to the other partners or to the company, if it is an independent personality. The other partners or the company are the customer and third parties are entitled to assume that the customer has been informed of all relevant information. This causes problems when a partner acts fraudulently or negligently and causes losses to the firm`s clients. In most states, a distinction is made between knowledge of the company`s general business activities and confidential matters that affect a customer. Thus, there is no attribution if the partner acts as a fraud against the interests of the company. Liability arising from tort is higher if the Company has benefited from the receipt of fee income for work performed negligently, even if only within the framework of the standard provisions of vicarious agent liability. Whether the injured party wishes to sue the partnership or individual partners usually falls within the jurisdiction of the plaintiff, since in most jurisdictions his joint and several liability exists.
Similarly, a seller`s agency relationship represents the seller in the transaction and the seller is considered a customer. A seller`s agent is also known as a listing agent. The Seller`s representative has the same fiduciary responsibilities to the Seller as the Buyer`s agent to the Buyer. In a seller`s agency, the customer relationship is established by an advertising contract. The Agency must be adopted retrospectively or granted in advance. In the first case, there must be tolerance on the part of the representative (whose recognition may be rightly implied) or explicit recognition. Similarly, the death of the agent will revoke an agency that is not associated with an interest, and this is the rule even if there are two or more agents. However, where a sub-agent is appointed by the agent, the authority of a sub-agent shall end with the death of the agent, unless the agent has appointed the sub-agent at the request of the principal. In this case, the sub-agent derives his authority from the client and not from the representative. Like most things you face day in and day out, it becomes so common that you don`t notice its complexity.
But for anyone working in a company, the agency is as central a part of their business law life as contract or labor law, and a good knowledge of its requirements is necessary. In general, one must look from the perspective of the client and the agent to determine whether the agent has implied authority. Orleans Parish Sch. Bd. v Goodyear Tire & Rubber Co., 1995 U.S. Dist. LEXIS 8638 (E.D. La.). However, if a third party has reason to believe that such an agency is based on the acts or omissions of the client, an implied agency may be established. This is the essence of the apparent ability to act.
This is a simple introduction to the extensive jurisprudence regarding the agency, and even the superficial examination above shows that the reason there are so many laws on this subject is the agency`s pervasiveness in the business and private world in all aspects of life, from business decisions to family decisions.
