An agent is someone who agrees to act on another’s behalf, usually for the purpose of carrying out a specific task. In the business world, this could include an insurance agent or attorney; additionally, registered agents for corporations and LLCs exist as well.
The precise nature of an agent in business is often debated, though it’s generally accepted that they are individuals who act on behalf of another and are subject to their authority. This relationship can be established through an express or implied agency contract, estoppel, necessity or operation of law.
Agency by Agreement/Contract:
Agency is an express or implied agreement that an agent will act for the principal. Common examples include real estate agency agreements, attorney retainer agreements, and administrative assistant contracts.
Agencies can also be created by the principal’s conduct or position in relation to the business of an agent, known as implied agency. Implied agency is frequently referenced in court cases where parties did not have an express agreement but were nonetheless deemed to have agency.
If an agent breaches his duty to the principal, they can be held liable in tort or through restitution for any profits that result from that violation. Engaging in double employment – employing a subagent to carry out duties for them or working for a principal with general agency with them – could constitute both breaches of contract and fraudulence.
A principal’s duties to their agent include paying reasonable compensation for services rendered, offering reasonable assistance and cooperating with them. Furthermore, agents have a legal responsibility to adhere to written contracts which may contain confidentiality obligations and non-disclosure of information.
Similar to an employer’s responsibility for its employees, an agent’s duty to their principal includes performing all authorized acts in the course of business. Furthermore, these obligations extend beyond timely reports and obeying instructions; additionally, all funds received from these activities must be reported back to the principal.
Furthermore, a principal’s duty to his or her agent is similar to that owed by a principal to its customers; this could include payment of interest on money received by the agent from the principal’s account as well as reimbursement for expenses incurred in fulfilling requests made by the agent or carrying out authorized acts.
Tax compliance is one of the duties an agent owes their principal, and whether this responsibility includes payment of taxes. Many jurisdictions require principals to pay taxes on any proceeds received from sales or other dispositions of their property. An agent’s obligation for such taxes can be reduced or eliminated through a written contract with the client.