Non-linear Pro vs Quick Takes Video - Nature of Agency Essay

Non-linear Pro vs Quick Takes Video - Nature of Agency - Essay Example Hence, the principal would be vicariously liable for the acts of the agent and would be responsible for all the negotiations and contracts that the agent has signed on his behalf (Herbert, 2010). The agency relationship would be having both commercial and legal effects. For example, an owner of the business would rely on various agents to do the ordinary day-to-day work of the business, whereas since a company is an artificial person, it would be represented through the act of the agents (including management and employers) that make decisions and take responsibilities on behalf of the company. Usually a contract or an agreement may be present between the agent and principal who may be in an oral or written format, and giving agency in an expressive or implied manner. Implied agency refers to acting out of necessity or the situation would dictate that an appropriate person make a decision on behalf of the principal. In a corporation, the senior executives and the management board hav e the implied authority and the apparent authority to make decisions on any matter on behalf of the principal/company (London International University, 2007). ... An agreement for agency may also be mentioned in the employment contract, be a separate agreement of agency, be mentioned in the contract with the third party, etc. Secondly, there is a relationship bringing third parties in contract with the principal, for certain works (Herbert, 2010). For an agent to act on behalf of the principal, he/she should have some authority to do so. If the agent was not acting out of his power and not out of necessity, the agent and not the principal would be held liable. The authority provided to the agent is of 3 types and are recognized by law. These include actual authority, apparent authority and ratified authority. Actual authority involves actual provision of authority to the agent to represent the principal in certain matter and make decisions. The authority provided here may be expressed or implied. If an agent has acted beyond the actual authority, it can be considered as a breach of contract. When an agent is acting within the scope of his empl oyment with the principal, then the claimant can claim from the employer. Ratification is a process in which an agent who had been acting on behalf of others in the past and would have performed certain non-authorized acts, but the same is being approved now (Rao, 2009). Apparent authority or ostensible authority refers to the conduct or words of the principal which would require a person to take decisions on behalf of the principal and act on behalf of the principal with any third party. Here the third party is in a position to believe that the agent is acting on behalf of the principal, even if the issue with acting with this particular third party has never been discussed between the principal and the agency. The third parties have acted within reasonable grounds,