An agency relationship (that is, between agent and principal) can be created in four ways. Describe and explain each move in which this relationship can be created.
Agency relation is a relationship where the principal allows an agent to act on his / her behalf. The relationship is created in the following ways; Agency by estoppel, by contract between two or more parties, by operation of the law, and finally by ratification.
Agreement between the parties
By agreement/contract is where parties enter in relation by either verbally, in writing, or from the conduct of the party/parties
By ratification
This is somewhat of a consent matter done for another and thus retroactively forms the agent relationship. For example, if person A does a favor to person B, and person A does it with knowledge of B, and B accepts the support. It is deemed that the acceptance retroactively made a relation.
Agency by estoppel
This is where the principal creates a situation that makes one to look like his or her agent even if you are not, and making others perceive you as an agent, you are estopped from repudiating this relationship.
By operation of the law
This relation arises when the law imposes an agency relationship. For example, the parent acts legally as an agent to their children this simply because the law provides it. Another example is for the emergency response team; they do not need to show their ID during an emergency.
Describe and explain the rights and duties that agents may have.
Rights of an agents
Right to remuneration, an agent has a right to receive a reward/remuneration on agreed terms; in the absence of an agreement, an agent is bound to receive reasonable compensation for giving out the services that are not gratuitous (Tosato, 2016).
Lien on goods, some agent who may have possession or deals in products or properties of their principal has right to retain/ lien those goods until all expenses they incurred are fully settled, or remuneration is made forth. When the agent is an unpaid supplier of goods has a right to stop products on transit.
Right to be repaid. An agent has the right to be compensated by his principal for all liabilities, charges, and expenses that they may have incurred during the execution of their role
Duties of an agent
An agent should act on behalf of the principal and also is subjected to the control of the same.
An agent should act within the scope of power and power vested on him or her by the principal
An agent owes the principal duties of care and diligence while discharging his/her duties
An agent is not supposed to acquire any material benefit from transaction conducted by on behalf of the principal
To act reasonably and avoid any conduct that may likely make the principal server damages or losses
An agent is supposed to comply with all lawful instruction given to him or her by the principal