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Liabilities of an agent principal and third party in an agency relationship?
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What is contained in the agency theory?
Agency theory is a theory explaining the relationship between principals, such as a shareholders, and agents, such as a company's executives. In this relationship the principal delegates or hires an agent to perform work. The theory attempts to deal with two specific problems: first, that the goals of the principal and agent are not in conflict (agency problem), and second, that the principal and agent reconcile different tolerances for risk.
How does agency problem affect the relationship of financial manager with the company?
agency problem affects the financial manager relationship with the company by means of trust. if we are going to study the principal-agent relationship (principals=shareholders ; agent=managers,CEO,BOD), the agent will stand for and on behalf of the principal with the accompany of trust and confidence by the principals, but when agency problem occur where the agents are planning to pursue some objectives that are attractive to them while not beneficial for the principal the gap between the shareholders and the management team were created...
How has the agency theory been described?
agency theory is to help devise techniques for describing the conflict inherent in the principal-agent relationship and controlling the situations so that the agent, acting from self-interest, does as little harm as possible to the principal's interest
Agency by ratification is not agency at all.Discuss?
agency of ratification is agency because by ratification the principal acknowledges to take the liability of the contract since the time of the comenmence of the contract aldhough he was not aware of the contract. All the liabilities that could have been incurred by the agent are transferred to the Principal as if he was the one who entered into the contract. So long as the principal is given all the material fact, the contract remains valid even if he ratified it by means of implied terms.
Agency by estoppel?
Legally binding agency relationship that may arise where, in fact, no formal agency agreement is in effect. A principal may give an appearance of agency relationship by, for example, furnishing his or her firm's call cards or other stationery to the agent. In such cases, the existence of an agency may be presumed, and the principal may be bound by the acts of the agent performed on the principal's behalf. Also called presumption of agency
How would you describe agency theory?
Agency theory pertains to the relationship between two parties; the first is the principal (or principals) and the second, the agent (or agents), who are engaged as employees or independent contractors.
What is contract of agency?
Agency law is concerned with any "principal-agent" relationship; a relationship in which one person has legal authority to act for another. The relationships generally associated with agency law include guardian-ward, executor or administrator-decedent, and employer-employee. Agency is an agreement, express, or implied, by which one of the parties (called the principal) entrusts to the other (called the agent), the management of some business; to be transacted in his name, or on his account, and by which the agent assumes to do the business and to render an account of it. As a general rule, whatever a man may do by himself, except by virtue of a delegated authority, he may do by a designated agent
What are the modes of a termination of Agency?
An agency may be terminated by any of the following modes.1. Expiration of Period: If agency is formed for a fixed period it may come to an end on the expiry of the period even if the business is not completed.2. By Mutual Consent: The agency can be dissolved at any time by the mutual consent between the principal and the Agent.3. Death of Agent or Principal: The relation between an agent and a principal is entirely personal. So death of either dissolves the Agency.4. Destruction of the Subject Matter: The agency dissolves if the subject matter of the agency is destroyed.5. Completion of Particular Job: If an agency is formed to carry on a particular under taking, it stands terminated on the completion of the particular job.6. By Becoming Alien Enemy: The contract between the agent and the principal may be terminated by illegality, as where the agency involves dealings with enemy aliens.7. By Insanity: When the principal has become insane the agency itself is automatically terminated, and the same is true where the agent becomes insane.8. Revocation of Authority: The principal may terminate the agent's real or actual authority at any time so when the principal revokes his authority of the agent, the agency is terminated.9. Bankruptcy of Principal: The principal's bankruptcy terminates the authority of the agent. This fact will thus dissolve the agency.10. Winding up of Company: The principal or agent may terminates the agency at the winding up of the company.11. Termination of Authority: When the agent gives up his authority, the agency is terminated12. Illustration: If an agent is employed to sell a house, the agency terminates if the house is destroyed by fire.
When an agency occurs an agent is authorized to act for another party which is called the?
Principal
What is the difference between franchise and agency?
Agency : principle is liable for the act of agent and agent get fees or commission from the principle. Franchise : Principle is not liable for the act of agent and PRINCIPAL get fees of commission form the agent.
Why is agency theory important?
Agency theory is used to understand the relationships between agents and principals. The agent represents the principal in a particular business transaction and is expected to represent the best interests of the principal without regard for self-interest. ... This leads to the principal-agent problem.
The relationship between consignor and consignee?
The relationship between the Consignor and the Consignee is that of a principal and agent.
