Discuss the various duties responsibilities liabilities etc

Discuss the various duties, responsibilities, liabilities, etc, of the Principal-Agent (employer-employee) relationship including how the legal requirements compare and relate to the biblical standards (Ephesians 6:5-9) for employer-employee relationships.

Solution

An agency is the creation of a contract entered into by mutual consent between a principal and an agent. By agency, a principal grants authority to an agent to act on behalf of and under the control of the principal. The relation between a principal and an agent is fiduciary and an agent’s actions bind the principal[i]. The law of agency thus governs the legal relationship in which an agent deals with a third party for his/her principal.

An agent owes certain duties towards his/her principal and a principal owes certain duties towards his/her agent. The scope of an agent’s duty to the principal is determined by:

An agent’s primary duties are:

Other duties of an agent include:

An agent is liable to a principal when he/she acts without actual authority, but with apparent authority. An agent is liable to indemnify a principal for loss or damage resulting from his/her act.

A principal owes certain contractual duties to his/her agent. Correlative with the duties of an agent to serve a principal loyally and obediently, a principal’s primary duties to his/her agent include:

Because of the fiduciary relationship, a principal owes his/her agent a duty of good faith and fair dealing[ix]. However, a principal can be relieved of contractual obligations by an agent’s prior breach of contract.

A principal has a duty to act in accordance with the express and implied terms of any contract between a principal and an agent[x].

When an agent acts within the scope of actual authority, the principal is liable to indemnify the agent for payments made during the course of the relationship irrespective of whether the expenditure was expressly authorized or merely necessary in promoting the principal’s business.