Agency: Definition Flashcards Preview

Business Entities > Agency: Definition > Flashcards

Flashcards in Agency: Definition Deck (5)
Loading flashcards...
1
Q

What is “agency”?

A

“The word “agency”, used in a legal context, refers to a relationship, usually created by contract, in terms of which the principal instructs the agent to act on his behalf in order to produce legally binding effects for the principal.”

2
Q

What kind of contract is an agency?

A

Tri-partite contract.

Since there are three parties involved, it creates some complexity in terms of contract law. Usually, the agent is working in a representative capacity to form a contract between the principal and the third party. As such there is more than one contract (agent - principal + principal - third party).

3
Q

Who is an agent?

A

“a person who has authority to act for and on behalf of another (called the principal) in contracting legal relations with third parties; and the agent representing the principal creates, alters, discharges legal obligations of a contractual nature between the latter and third parties”.

4
Q

What is the nature of the agent/principal relationship?

A

The principal - agent relationship is fiduciary in nature; the agent must show a high degree of loyalty to the principal.

5
Q

What is a mandate?

A

If the contract is gratuitous then the relationship is usually known as mandate - mandate (principal) and mandatory (agent), rather than principal and agent. This is uncommon in commercial spheres.