Agency can be described as a business entity through which it provides services to its clientele, which might include other establishments, the government or individuals (USLEGAL Staff, 2007). The principal-agent partnership is a mutually agreed upon relationship which through the signing of a contract, the principal gives authority to the agents to perform actions on its behalf. The concept of agency is derived from the relationship that exists between two parties. The agent is usually under the control of the agency. The main aim of hiring agents is to enable the principle to interact with third parties who comprise of the clientele. The origin of this type of relationship originates from the ancient form of master- servant interactions.

The agency can face legal law suits incase there is injury to the clientele which is likely to be inflicted by the agents. An example of such a relationship is that of real estate agents. They are usually hired to perform task such as renting, purchasing and selling properties for clients. Other important functions include interviewing potential clients, drafting the real estate contracts as well as bringing the client to their referred properties. An example of a real estate company, which employs agents to perform the aforementioned tasks, is Century. It is a real estate company renowned for its prowess in the business. It happens to be one of the most recognized real estate brands globally with a population of 10, 000 sales agents all over the world.

            According to the law, an agent should perform several duties as long as they are contracted by the principal. The duties are as follows

  1. The agent should perform actions, which have the best interest of the principal in consideration (Estates agent Authority Staff, 2010). This duty is called upon when the agent is tasked with the responsibility of making deals or transactions with the third parties. The deals drawn should benefit the principal and the agent is allowed to ensure that while still maintaining integrity.
  2. An agent is required be loyal to the current principal. Their allegiance to the previous principal is diminished once they sign a contract with the current one. Conflict of interests should be minimal even in the case of dual agency (Estates agent Authority Staff, 2010). In case of an agent working for two principals, they are required to disclose the information to both parties. The agent is also required to avoid cases where conflict of interest might hinder them from performing the duties outlined in the contract (Kimmoms, 2012). This case scenario might occur when the client is a relative or an ally. Failure to disclose this information to the agency is a breach to the relationship that exists between the two parties.
  3. According to the federal law, the agent should act in a way to benefit the principal thus; they are not supposed to make any profit in the name of the agency. All the benefits acquired should be directed to the principal (Estates agent Authority Staff, 2010). If an agent makes profit or benefit it is seen as secret profit. This act is considered as a breach to the contract and the principal is allowed to hold the agent liable and request for any remedies they might consider as penalty for the misconduct. An example of secret profit is a real estate agent rents out an apartment, which is supposed to be enlisted in the listing, and collects the rent without the consent of the proprietor.
  4. The agent is also required to act in accordance with the code of conduct stipulated in the contract (Estates agent Authority Staff, 2010). This translates to the fact they are not supposed to require any material benefit from the customer concerning the transactions made with the third party. This also means that they should act in a manner, which will not harm principal’s business enterprise.

The difference between an employee and an agent in terms of duties is that an employee is required to perform the duties daily which are payable through salary. The agents perform the duties when called upon by the agency (Kimmoms, 2012). The employee is also under the intense control from the agency concerning the working hours, provision of the necessary tools and the geographical location. The duty appointed to an agent allows them to have a much more flexible work schedule (Kimmoms, 2012). The employee duties are general as they might vary depending on the department; however, this is not the case with an agent. The duties and services offered the agent are specific depending on the needs of the establishment.


Estates agent Authority Staff. (2010). (5) Agent’s Duties to Principal under Common Law. ESTATES AGENTS AUTHORITY. Retrieved from

Kimmoms, James. (2012). Real Estate Agency Law – Fiduciary Duties are Like an OLD CAR. Retrieved from

USLEGAL Staff. (2007). Rights, Duties, and Liabilities between Principal and Agent. USLEGAL. Retrieved from

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