Agents and clients have obligations to each other under the common law. For example, the agent has duties of diligence, loyalty and obedience to the client, similar to those held by a trustee. The principal has a duty to assist the agent in providing his services, an obligation to compensate the agent for the services (unless the agent chooses to work for free) and an obligation not to act in a manner that harms the agent`s reputation. In addition to determining an employee`s status for tax and indemnity insurance purposes, it is sometimes crucial for liability insurance decisions, which generally exclude accidents involving the insured`s employees from coverage. General Accident Fire & Life Assurance Corp v. Pro Golf AssociationGénéral Accident Fire & Life Assurance Corp v. Pro Golf Association, 352 N.E.2d 441 (Ill. App. 1976). such a situation. The insurance policy in question covered members of the Professional Golfers` Association.
Gerald Hall, a golf professional employed by the local parking service, was insured under the policy, which excluded «bodily injury to any employee of the insured resulting from and in the course of his employment by the insured.» That is, no Hall employee would be insured (rather, such a person would have coverage under the Workers` Compensation Acts). Thirteen-year-old Bradley Martin was on the golf course playing in the junior league. At Hall`s request, he agreed to retrieve golf balls or «shagen» to be beaten during a lesson Rever gave; He should be compensated, as Hall put it, «either by golf instructions, or by money, or by hot dogs or anything else.» During the lesson, a golf ball hit by Hall hit young Martin in the eye. If Martin were an employee, the insurance company would be liable; If he were not an employee, the insurance company would not be liable. The trial court found that he was not an employee. The evidence showed that sometimes boys who «shook» balls were paid, golf instructions or food were given, so the issue of compensation was ambiguous. Martin was not instructed on how to perform (the admittedly simple task) of retrieving golf balls, no control was exercised over him, and no equipment other than a bag was needed to collect the balls: «We think the evidence is subject to various conclusions. We cannot say that the decision of the trial court violates the obvious weight of the evidence. An explicit power of attorney means that an agent has been expressly informed that he or she may act on behalf of a principal.
Even though the agency contract does not need to be in writing, the contracts that agents enter into with third parties often have to be in writing. Thus, Article 2-201 of the Unified Commercial Code expressly requires that contracts for the sale of goods at a price of five hundred dollars or more be concluded in writing and «signed by the party against whom performance is to be obtained or by his authorized representative». 2. Duty to compensate the officer: For example, a landowner hired two officers to dig a trench, but did not tell the officers that a telephone line was running at the location where the trench was to be dug. The officers cut the line and the phone company chased them. The client/landowner was obliged to compensate the vicarious agents for this liability.  A contract is void or voidable if one of the parties is unable to enter into a contract. If the client and the authorized representative are not able – e.B. if a minor asks another minor to negotiate or sign an agreement, the contestability of the contract cannot be taken into account. But suppose that only one or the other lacks capacity. In general, the law focuses on the principal.
If the customer is a minor or unable to do so, the contract may be cancelled even if the contractor is fully competent. However, there are certain situations where the agent`s ability is important. Therefore, a mentally incompetent agent cannot bind a client. In 1986, the European Communities adopted Directive 86/653/EEC on self-employed commercial agents. In the United Kingdom, this has been transposed into national law in the Commercial Agents Regulations 1993.  Thus, agents and principals in a commercial agent relationship are subject to both the common law and the Commercial Agents Regulations. If the agent has acted within the framework of the authorisation actually granted, the contracting authority shall compensate the agent for payments made during the relationship, whether the expenditure was expressly authorised or was necessary only to promote the contracting authority`s commercial activities. The Agent`s obligations may vary depending on the relationship between the parties and the nature of the obligations that the Client requires of the Agent. Some examples: In return, the principal must fully disclose all information relevant to the transactions that the agent is authorized to negotiate. Suppose Arthur is Paul`s agent, who is employed until October 31. The 1.
In November, Arthur buys materials from Lumber Yard – as he has done since early spring – and debits Paul`s account. Lumber Yard, who doesn`t know that Arthur`s job ended the day before, bills Paul. Will Paul have to pay? Yes, because the termination of the agency was not communicated to Lumber Yard. It seemed that Arthur was an authorized representative. This issue is addressed in Chapter 12 «Liability of the procuring entity and the representative; Termination of the Agency».. . .