ABSTRACT
This chapter focuses on the role of the agent, and the interrelationships between the agent and the business. A business may use an agent to undertake specialist work which the principal does not have the time or specialist skills to undertake. The use of agents can be very helpful to a growing business, but the principal must be absolutely clear about the contractual and payment arrangements in advance. The relationship between the principal and the agent can become complicated if the agent acts inappropriately in relation to the contract. If the contract is approved, this ratifi es the relationship between the principal and the agent, including the actions of the agent (which the principal can then be liable for). Writing out the agreement can help defi ne the relationship between an agent and a principal. However, the principal must ensure that the agreement is written clearly and is unambiguous, otherwise there can be more problems in the future. Termination dates are particularly important for both parties, including the actions included within the termination date. See Claramoda Ltd v Zoomphase Ltd (2009). A key area of consideration is how and when the agent can act on behalf of the business – their right to do this and the legal nature of any agreements made in relation to the business. Complexities can arise for a business if the agent only has actual authority in a few areas. Implied authority may be construed in other areas as well, and this is when the arrangements, and who has authority to agree them, can become blurred. Principals and agents should be clear about the level of authority in place, and how areas where the agent does not have authority will be dealt with. For example, if the agent is providing a service on behalf of the company, does the agent have the right and the skills to perform that service? As you read through the chapter, think about the contract implications of using an agent, and how these may apply in different circumstances.
