Understanding the Agent/principle relationship

Agent/principle relationship refers to an arrangement whereby one firm appoints the other independent firm to act on its behalf.
In this case, the agent’s behalf is the principle but with no conflict of interest in performing the act. Agency refers to the relationship between these two parties, while the law of agency guides the relationship.
Duties owed to one another.

Duty of loyalty

The principal should be loyal to the agent in that the agent will subordinate its interest to the principals’ interests if they are within the relationship.

The duty of good conduct

Here, the agent should act in a manner that does not harm the principal’s reputation by providing effective information and facts.

Duty of diligence and competence

The agent should ensure proper care is needed in the situation on behalf of the principal.

The duty to act following the contract

The agent should comply with all the terms of the contract and following the implied terms.
Reference
Grower, J. A. (2018). On the Relations between Agent and Principal: Angove’s Pty Ltd v Bailey. The Modern Law Review, 81(1), 141-153.
 

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