TYPES OF AGENTS
The major types of agents are said to be the Universal agent, General agent and Special agent. (Latimer, 2009, p. 805-806). From the perspective of the nature of work to be performed, most agents would fall under the Universal agent.
1. Universal Agent
Is an agent who is appointed to attend to all the business activities of his principal. He has unlimited authority to act for the principal in any capacity, this means that the agent can manage most business activities of the principal.
Factor(s) – also known as a Mercantile agent, has authority in the course of business to act as agents to sell, dispatch goods for sale, purchase goods or raise money on the security of goods.
Auctioneer – an agent who sell items of property on behalf of the principal/owner at a public auction and is rewarded in a form of commission once an item of property is sold.
‘Del credere’ Agent – undertakes responsibility for the performance of contracts. He guarantees his principal that the third persons/party whom he enters into contracts with shall perform their financial obligations.
He assures the principal that the purchasers (third party) will pay for any goods they take. In the event that the third party fails to pay, he is liable on the failure of the third party. He is distinct type of agent who acts as guarantor and agent at the same time and therefore has a higher risk than ordinary agents and receives a higher fee/commission.
Commercial Agent / Commission Agent – self-employed intermediary acts similar to a mercantile agent (factor). This agent has continuing authority to negotiate the sale or purchase of goods on behalf of the principal on the best possible terms and conducts business in his own name. He may or may not have possession of goods and is entitled to commission.
• Agent must be given his commission at the start of his contract and at the close of his contract.
• Agent must be compensated (commission) for even without his notice and a repeat purchase (repeat order) was arranged.
• Agent must be compensated (commission) when the principal fails to fulfill his obligation as per the agency contract.
Broker – an agent or insurance agent who is authorized to buy and sell property on behalf of the principal or other persons. A broker does not have possession of goods nor can he contract in his own name. The broker brings seller and buyer together to bargain and he receives a commission called brokerage.
Banker – is an agent for his customer(s) and acts on their behalf in all their financial dealings with the bank. A banker acts as a mercantile agent (factor) for his customer when he collects cheques, drafts, bills, pay insurance premiums and buy or sell securities.
Real Estate Agents – an independent person or a business/company hired by the principal/owner of real property. The real estate agent specializes in searching for tenants and purchasers and introduces those who are willing, to purchase or rent the property.
Partners – in a partnership, each partner especially those of the active partners can act as agents to bind partnership into business contracts. Partners are agents or is an agent of his fellow partners with regards to the partnership business.
Company Directors – a company or corporation is an artificial legal entity that acts or functions through natural persons. Where the person so acting is in control and regarded as the leading/guiding force of the company, the company is said to act directly, this means he acts not as a delegate of the company but is the company itself.
Married Person (Woman or Man) – a spouse may grant legal authority on either partner to act/make contracts on his/her behalf.
2. General Agent
This agent has limited authority. He may establish contracts and attend to business dealings for his principal, only as a general agent within the scope of authority he is permitted. E.g. Principal hires ‘A’ as general agent. ‘A’ is hired to:
• Take care of all the Principals’ outlets
• Represent the Principal on duty travels
• Act within the regular business operation of ‘A’s own business
Principal will be accountable of acts done by ‘A’ within the usual agreement of authority unless principal has expressly disallowed certain acts and given notice to third parties who will be likely affected.
3. Special Agent
This agent has limited authority and is restricted to act to some degree of authority compared to a universal agent or a general agent. A special agent is hired for a specific purpose. The instant that the transaction is completed, the scope of authority to act as special agent is terminated.
E.g. A real estate agent sells all the white goods in the house. The real estate agent is a special agent because selling of the white goods is outside the usual business activity of a real estate agent.
REFERENCES:
o Latimer, P., (2009). Australian Business Law
o https://www.slideshare.net/komma_129/law-of-agency-9495478
o www.msu.ac.zw/elearning/material/1298274783Law%20of%20agency.doc law on agency
o The Institute of Chartered Accountants Sri Lanka
https://www.casrilanka.com/casl/images/stories/EDBA/law%20of%20agency.pdf
