An agent is a person who acts in the name of and on behalf of another, having been given and assumed some degree of authority to do so. Most organized human activity—and virtually all commercial activity is carried on through agency. No corporation would be possible, even in theory, without such a concept. We might say “General Motors is building cars in China,” for example, but we can’t shake hands with General Motors. “The General,” as people say, exists and works through agents. Likewise, partnerships and other business organizations rely extensively on agents to conduct their business. Indeed, it is not an exaggeration to say that agency is the cornerstone of enterprise organization. In a partnership each partner is a general agent, while under corporation law the officers and all employees are agents of the corporation.
Agency law established that the principal has several duties to the agent, most can be modified or eliminated by agreement between the parties. On the due performance of his duty the agent is entitled to his rights under the contract of agency provided he commits no breach of his/ her duty or contractual terms of the agreement denying him of her of such rights:
Right to indemnify
Unless expressly excluded by contract, an agent has a right to indemnity while acting for the principal, the agent may incur certain liabilities/costs or responsibilities or make payment on behalf of the principal. In such circumstances the agent will be entitled by Common Law principle to be indemnified against such liabilities or to recover any amounts so paid. Indemnity cannot be claimed for an illegal act unless the agent was unware of the illegality or was misled by the principal as to the nature of the transaction.
Right to lien
A lien is a legal right that a creditor has to retain the goods of a debtor as security for the performance of an obligation. This is also available to an agent in respect of the principal’s goods in his possession until his claim are met. It is only a possessory lien which confers no right to sell.
Right to remuneration
Whether it is by commission, a fee, or, a share of profit or proceeds, it is the primary duty of the principal to pay remuneration for services rendered by the agent. But the right of the agent to remuneration depends upon agreement express or implied. Clearly, a gratuitous agent has no right to remuneration. Payment is also implied where there is no concluded contract on it. However, benefit is the key note to remuneration on quantum meruit so that where the principal derived no advantage from the agent’s services no sum will be payable.