First Principles of Business Law

1. General concepts underlying agency

1.1. The notion of acting on behalf of another person

An agent can be described as a person who carries out a legal transaction on behalf of someone else. The agent acts on behalf of, or in place of, the person that they are representing. Agents are commonly used in business transactions because, particularly in larger businesses, it is impossible for one person to do everything themselves.

Although most people are familiar with the general idea of an agent, they may not fully understand all the legal concepts involved. Nor is it always easy to understand how the law resolves the many different questions that can arise in agency situations.

This module will introduce the law of agency and help you to:

• predict and avoid unwanted outcomes in agency relationships
• recognise when and how agency relationships arise
• explain what legal rights and duties exist between the parties in an agency situation
• explain and resolve legal questions that arise in agency situations