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Word Count: 359
The agency concept is where one person the principalemployer appoints another the agentemployee to act in hisher place when dealing with third parties In companies employees would be considered agents Agents are appointed to perform all duties the principal would do or specific duties A principal-agent relationship may be created by a contract or by appearance that this relationship exists If a person acts as an agent for someone and that other person approves the act the principal-agent relationship is considered true In some cases it may be necessary to appoint an agent to someone if an emergency arises By law an agent must follow instructions given by the principal and act in the best interest of the principal An agent is expected to perform the skills that he or she claims to possess In addition there should be up-to-date records of all business transactions available and the principal should be made aware of such transactions Lastly the agent is responsible for communicating information back to the principal What the agent knows the principal knows The principal also has specific obligations to the agent and must cooperate with the agent If the contract between the two parties state there will be monetary compensation the principal is responsible for paying the agent In addition the principal must reimburse the agent for expenses or personal losses heshe may incur relating to the principals business A principal in most cases is considered the employer of the agent Like any employer heshe must provide the employee with safe and adequate working conditions If an agent commits a wrongful act that causes injury to another while carrying out the principals business the principal could be liable This theory is known as vicarious liability However if the agent commits an intentional tort on a third party the principal is not liable in most cases On the other hand if the intentional tort is committed because the agent thought it would further
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