At the end of this blog post, students should be able to know the meaning of Agency, The meaning of Agent, types of Agents with Thier features, duties of an Agent and thier rights.
Table Of Contents
- Meaning of agency
- Meaning agent
- Types of agents
- Functions of agents
- Duties of agents
- Rights of agents
Meaning Of Agency
An agency can be defined as a legal relationship that exist between two parties when one called the agent is employed by another called the principal to bring the principal into a legal relationship with the third party.
Meaning Of Agent
An agent is a person who is given the authority by the principal to enter into a contract on his behalf. The agent has the power to make a binding contract between his principal and a third party without himself becoming a party to the contracts.
TYPES OF AGENTS
Below are the various Types of Agents we have in Commerce:
1. Universal Agent: This is an agent who has unrestricted authority to enter into a contract on behalf of the principal. He may even perform acts that his principal could have performed. This kind of agent is appointed by a deed known as power of attorney.
2. General Agent: General Agent is another types of agents. This is an agent who has the authority to act in all matters of a particular business. He can perform any of the duties which are within the scope of a particular business and trusted to him, e.g, an accountant.
3. Special Agent: This is an agent appointed for a particular purpose, normally not part of his normal business activities, and is therefore giving only limited powers.
4. Del credere Agent: This is an agent who undertakes to indemnify the principal against any loss arising from the failure of the people to pay for goods sold. He receives in return extra remuneration which is higher than all other agents. Del credere Agent guarantees payment to his principal for goods sold on his principal’s behalf and for which he receives additional commission known as del credere commission.
Features or Functions of An Agent as Del credere agent
- He takes possession of the Goods.
- He can sell in his own name.
- He undertakes to indemnify his principal against any loss.
- He receives higher commission call del credere commission.
5. Commission Agent: This is a merchant who buys and sells goods or commission. This agent usually exercises physical control over and negotiates the sale of the goods which are handled by him.
6. Factor: Another types of agents is called Factor. This is an agent who is employed to sell goods delivered to him by the principal for a commission. He has possession of the goods and can sell it in his own name.
Features Or Functions Of An Agent as a Factor
- He has the right of lien on the goods in his possession.
- He can handle and sell goods in his own name.
- A factor can issue receipt on its own name.
- He can give the usual business warranties.
- The factor has the authority to raise money on security of goods.
- He can Sue the principal for commission.
- The agent can grant credit to the buyer.
- He has an insurable interest in the goods.
7. Broker: This is an agent who brings the principal into a contractual relationship to buy or sell goods or services with the third party. He links the principal with the third party and receives commission termed brokerage. They can be found in the stock exchange market, the insurance industry, etc.
Difference between a Factor and a Broker
- A factor has possession of the goods – A broker is not in possession of the goods.
- He can sell in his own name – He cannot sell in his own name.
DUTIES OF AN AGENT
Below are the duties of an agent in law of agency. So a good agent must perform the following duties:
- He must obey or carry out all the law instructed by the principal.
- He has to exercise reasonable care, skill and diligence in performing his duties.
- Another duties of an agent is that he must act in good faith and honesty by not engaging in any competing business to the detriment of the principal.
- He must act personally, i.e, he must not delegate his duties as an agent to someone else.
- He must not misuse the confidential information in respect to the affairs of the principal.
- He must render an account, (i.e. stewardship) to the principal whenever required.
- He must not take any secret gain beyond the authorized commission and any other remuneration.
- He must not make secret profit or accept bribes in respect of the agency.
- The agent must not misuse confidential information regarding his principal’s affairs.
- The agent must keep proper account of all transactions connected to the agency.
- He must not delegate his duties to another party.
- An agent must follow the terms of agreement of the agency.
What an Agent cannot Perform
- He cannot vote on behalf of the principal.
- The agent cannot give testimony in court on behalf of the principal.
- An agent cannot execute an affidavit.
Rights of An Agent
- Right to retain Goods: The seller has a right to retain the possession of the goods if not paid for.
- Right of stoppage in transit: The seller has the right to stop the goods going to the buyer in order to regain and retain the possession of the goods until he is paid.
- Rights of Resale: The seller has the right to resell the goods especially perishables when he has notified the defaulting buyer who, despite the notice still fail to pay.
- Legal Action: The seller has the right to Sue the buyer for the price of the goods if the buyer has taken possession of the goods.
- Recovery of possession from the buyer: An unpaid seller has the right to recover the goods already delivered to the buyer.
- Issue of ultimatum: Unpaid seller has right to give ultimatum to the buyer compelling him to pay.
Revision Questions
- Define Agency
- What is the meaning of agent
- List the types of agents and Thier Functions.
- Mention the duties of an agent
- What are the right of an agent