Agency Relationship

Agency Relationship

  • Submitted By: agnespr
  • Date Submitted: 12/16/2008 12:28 AM
  • Category: Business
  • Words: 1363
  • Page: 6
  • Views: 649

Pavla Routová, ATP


Agency relationships

To start my essay, I chose a story that illustrates the topic. Imagine two designers, John and Peter, who work together under contract on a project for a client. It is a serious business. One day, John takes the complete project created by the two of them to the client and pretends it is all only his work. The client is satisfied and John obtains a big payment. Peter knows nothing about it and finds out only during the next encounter with the client. In this situation, John and Peter are in agency relationship and both have fiduciary duties to each other. They must put the best benefits of the client above their personal interests. John breached by his acting his fiduciary duty. What would courts say about it? In writing about the Agency relationships I will discuss first the Agency concepts in general and second how these relationships work.

Writing about Agency concepts, at first we have to look at what an Agency is. Agency is a relationship between someone who works on behalf of another person or company. The former is called Agent, the later is called Principal. The key characteristics of an Agency are these: only the Principal is bound and can be sued or can sue the Third party concerning the contract that the Agent concluded for the Principal; and at the same time the Agent is not liable under the contract between the Principal and the Third party. The basic rule is that the Principal becomes responsible for the acts of the Agent, and the Agent's acts must be conformable with those of the Principal.

Now that we know what an Agency is, I can write about agency concepts. Agency relationships are common in many professional fields, e.g. employment procurement (modeling agency), real estate transactions, contract negotiation and promotion such as business management for publishing, music, movies, etc. Models, actors, musicians or athletes have very often their agents to secure...

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