Q.
The relationship between partnerships, employee and employer, trustee and beneficiary or husband and wife can be confused with that of agent and principal, as in Law of Agency or Contract Law. Discuss.
A.
Read about law of agency in Malaysia here.
From SingaporeLaw.sg, a good summary of the implication of law of agency is extracted as below.
All definitions suffer from inadequacies but essentially agency is defined as the relationship which arises where one person known as the agent acts for another known as the principal.
Through the acts of the agent, the principal and a third party may be brought into a contractual relationship. The agent may also have the power to dispose of property of the principal to a third party.
Generally the agent´s acts have such effect because the principal has authorized the agent to do the acts in question and the agent has agreed. The agent in a sense becomes an extension of the principal and is therefore capable of altering the principal´s legal position either by binding him to a contract or effecting a binding disposal of the principal´s property.
How agency relationship can contrast other types of relationship, for example like employment.
At common law, there are a number of relationships that resemble agency but may not have the distinguishing feature of being able to affect the legal position of another as in agency, e.g. servants/employees, bailees, trustees, etc.
For example, a servant or employee may be given specific tasks to perform which, though important, do not confer on the servant or employee any authority or power to bind the master vis-à-vis a third party.
A finance manager of a company may not be authorized to enter into transactions on behalf of the company that he or she works for. The finance manager´s role may simply be to ensure that the accounts of the company are kept up to date.
On the other hand, there are many employees who would have authority to bind their principals. A good example is the managing director of a company. As the officer of the company charged with the day to day running of the company, managing directors frequently have wide powers to enter into transactions on behalf of their companies.
A bailee is a person to whom goods have been entrusted. Normally, bailees do not have any power to deal with the goods that have been entrusted to them. However, bailees can also be given authority to dispose of the goods entrusted to them, or such authority can sometimes arise by operation of law. In such circumstances, the bailees are also agents.
A trustee´s role is to hold property for the benefit of another person. A trustee may have no authority to enter into contracts or dispose of the trust property. Nevertheless, trustees may sometimes be conferred with such power. For example, the trust document may confer on the trustee a power to invest, in which event the trustee acquires agency powers and any investments the trustee makes within such power will bind the trust property and the beneficiary of the trust.
Thus, in the first instance, agency relationship between a principal and an agent is given different definitions with inadequacies. It is not between husband and wife, neither between employee and employer. It is by definition, broader than such interpretation. Nevertheless, with inadequacies.
Ref:
Law of Agency, SingaporeLaw.sg, available at
http://www.singaporelaw.sg/sglaw/laws-of-singapore/commercial-law/chapter-15