Jan 30, 2017

The Importance Of Agents In Commercial Transactions| Hightowerlawyers


An agent is one who has express (oral or written) or implied authority to act for another (the principal) so as to bring the principal into contractual relationships with other parties. He is under the control (is obligated to) the principal, and (when acting within the scope of authority delegated by the principal) binds the principal with his acts.


Agents are best described as conduit pipes in a commercial transaction between a principal and the third party. Simply put, he is the ultimate middle man who ensures that interaction between two or more parties equals an exchange in goods, services or something of value.

As middleman he never acts on his own accord, as he does what the principal requires of him or what the principal would have reasonably done in that transaction. By law, his acts are binding on the principal. Therefore, it is as though the principal himself was the one performing the act. Some might think of him as a hired body double, as seen in the movies.

The legal maxim is qui facit per alium facit per se, which means, he who acts by another act by himself.  In the case of Bevan v. Webb, Stirling J stated that “whatever a man sui juris may do by himself he may do by another”.

The principal refers to the person on whose behalf another (the agent) acts. While the third party, is the other person in the transaction who is bound by it.

For a person to be called an agent in law, he must possess certain characteristics, such as:

1.     He must have the power to act.
2.     He must act for and on behalf of the principal.
3.     The consequence of such act must be to bind the principal and the third party.

The importance of an agent can be examined in a real estate transaction. In this instance, a land owner employs the services of an agent who helps in getting a tenant or a buyer to occupy the premises. This tenant or buyer as the case may be is the third party in the transaction. Once the transaction has being concluded the agent steps out of the transaction because legal relation has being created between the land owner and the tenant. Talent-Agency relationships in the entertainment industry are also shining examples of agency in commercial transactions. Furthermore, agency relations can also be initiated between professionals and the clients they represent.

It is pertinent to note that an agent has rights and duties which he is entitled to and bound by. In respect of the former, his rights include the right to indemnity, lien and remuneration, while the latter includes the performance of undertaking, obedience, care and skill, non-delegation and good faith.

From the foregoing, it is safe to conclude that the role agents play in transactions ensures that the wheels of commerce keeps grinding for the benefits of principals and third parties. In a fast-paced world agents are absolutely necessary.

HighTower Lawyers


Ed’s Note – This article was originally posted here
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