An agent is a person or entity authorized to act on behalf of another person or entity, known as the principal, in conducting business, making decisions, or entering into contracts. The relationship between the agent and the principal is governed by an agreement (explicit or implied), where the agent acts within the scope of authority granted to them.
The concept of an agent is widely used in legal, commercial, and organizational contexts, enabling principals to delegate responsibilities and manage affairs through trusted representatives.
Rights of an Agent
1. Right to Remuneration
The agent has the right to receive compensation or commission for their services as agreed upon with the principal.
2. Right to Indemnity
An agent has the right to be indemnified (compensated) by the principal for expenses or losses incurred while performing lawful acts on behalf of the principal.
3. Right to Retain Payments
The agent can retain money or goods belonging to the principal until they are compensated for dues like remuneration or expenses.
4. Right to Exercise Lien
The agent has a right to hold the principal’s goods until payment is made for services rendered.
5. Right to be Informed
The agent has a right to receive all relevant information and instructions necessary to perform their duties effectively.
Duties of an Agent
1. Duty of Care and Skill
The agent must perform their duties with due diligence, care, and competence, acting in the best interest of the principal.
2. Duty to Follow Instructions
The agent is obligated to act according to the lawful instructions provided by the principal.
3. Duty to Act in Good Faith
The agent must act honestly, avoiding conflicts of interest and prioritizing the principal’s interests.
4. Duty to Maintain Confidentiality
The agent must not disclose the principal’s confidential information to third parties unless authorized.
5. Duty to Account
The agent is required to keep proper accounts of transactions conducted on behalf of the principal and provide accurate reports.
6. Duty to Avoid Personal Gain
The agent must not make secret profits or benefit personally from the agency relationship without the principal’s consent.
7. Duty Not to Delegate
Unless expressly authorized, the agent cannot delegate their authority or responsibilities to another party.
8. Duty to Communicate
The agent must inform the principal of all relevant matters, including risks or potential opportunities that arise during the agency relationship.