The law of agency governs commercial relationships by addressing a range of fiduciary duties, including contractual, quasi-contractual, and non-contractual obligations. This law allows an individual to act as an agent on behalf of another person, called the principal. As an agent, they can engage with third parties to complete tasks on behalf of the principal. This is legal because the principal grants the agent the authority to act or complete tasks on their behalf.
This branch of law delineates and regulates the various relationships involved in the agency. It distinguishes between:
The internal relationship between agents and principals, commonly referred to as the principal-agent relationship;
The external relationship between agents and third parties with whom they interact on behalf of their principals; and
The interactions between principals and third parties when agents are engaged in dealings. This comprehensive framework ensures clarity and proper management of obligations and responsibilities within these relationships.
An agent has numerous responsibilities and must perform their duties with diligence. The agent must accept and perform tasks as specified by the principal. Additionally, an agent must not undertake tasks that conflict with the duties specified by the principal. According to the law, an agent may handle conflicting interests only if full disclosure is made and consent is given by the principal.
The law also stipulates that an agent must not illegitimately assume power or transfer it to a third party. In return, the principal is required to provide full disclosure of all relevant information regarding the transactions the agent is authorized to negotiate.
The principal cannot revoke the agent's authority once it has been partially exercised in a way that binds the principal. However, the principal can revoke the authority at any time before it has been exercised. Additionally, if the agency is established for a fixed period, the principal cannot terminate it before the end of that period, except for sufficient cause.
A third party may rely in good faith on representations made by someone who claims to be an agent. It is often not cost-effective to verify whether an individual who claims to have authority actually possesses such authority.
If the agent possesses actual or apparent authority, they will not be held liable for actions taken within that authority, provided the agency relationship and the principal's identity are disclosed.
A legal entity, such as a corporation or organization, can also act as an agent. This means that businesses, firms, or other types of entities can undertake tasks and responsibilities typically assigned to individual agents.
Warranty Valet operates similarly by managing warranty claims on behalf of our customers who contact us for this service. We initiate a customer service agreement to obtain formal approval before commencing the warranty claim process. Additionally, our customers provide us with the essential information required to process their warranty claims efficiently. Following this procedure, we contact the relevant third parties (brands) to initiate the warranty claims on behalf of our customers. We keep our customers updated throughout the process and ensure that their claims are resolved successfully. Warranty Valet never discloses customer details to individuals or entities not specified by the customers and will not act contrary to their interests.
Here is the Agency Law for the persons who want to verify more about the law of agency or agent law and also to clarify any doubts that you may have.
Last Edited on 2024-07-30