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–41–
Text 2. AGENCY DISTINGUISHED
FROM OTHER RELATIONSHIPS
1. Agents and trustees
Agents resemble trustees in that both stand in a fiduciary position
so that they must not make a secret profit and must not allow their
interests to conflict with their duty. Again, if a principal entrusts
property to an agent who misappropriates it, the agent can be regarded
as a trustee for the purposes of the Limitation Act, 1939. On the other
hand, an agent differs from a trustee in various ways. A trustee is the
legal owner of property, while an agent has, at most, a legal power to
dispose of it. Again, an agent genuinely represents his principal,
whereas it cannot be said that a trustee represents his beneficiaries.
Finally, there are many cases where the principal-agent relationship
is merely that of creditor and debtor. Thus, an agent who receives a
bribe from a third party is under a personal duty to pay it over to his
principal, but this does not give the principal any proprietary interest
in the bribe, nor in any property bought with it.
2. Agents, servants and independent contraktors
The distinction between servants and independent contractors
turns on the master's right to control how the work is to be done, a
right which exists in the case of a servant, but not in the case of an
independent contractor. The distinction between servants and inde-
pendent contractors, on the one hand, and agents, on the other, is
essentially one of function, in that agents are mainly employed to
make contracts and to dispose of property, while servants and inde-
pendent contractors are often employed for other tasks. It is not
surprising, therefore, that in the law of contract, agency is all impor-
tant, while the distinction between servants and independent contrac-
tors has little significance, whereas in the law of tort the employer's
liability turns primarily on the distinction between servants and inde-
pendent contractors, and the doctrine of agency has little importance
except in relation to torts connected with contracts or with the trans-
fer of property.
Text 2. AGENCY DISTINGUISHED FROM OTHER RELATIONSHIPS 1. Agents and trustees Agents resemble trustees in that both stand in a fiduciary position so that they must not make a secret profit and must not allow their interests to conflict with their duty. Again, if a princi pal entrusts property to an agent who misappropriates it, the agent can be regarded as a trustee for the purposes of the Limitation Act, 1939. On the other hand, an agent differs from a trustee in various ways. A trustee is the legal owner of property, while an agent has, at most, a legal power to dispose of it. Again, an agent genuinely represents his princi pal, whereas it cannot be said that a trustee represents his beneficiaries. Finally, there are many cases where the princi pal-agent relationshi p is merely that of creditor and debtor. Thus, an agent who receives a bribe from a third party is under a personal duty to pay it over to his princi pal, but this does not give the principal any proprietary interest in the bribe, nor in any property bought with it. 2. Agents, servants and independent contraktors The distinction between servants and independent contractors turns on the master's right to control how the work is to be done, a right which exists in the case of a servant, but not in the case of an independent contractor. The distinction between servants and inde- pendent contractors, on the one hand, and agents, on the other, is essentially one of function, in that agents are mainly employed to make contracts and to dispose of property, while servants and inde- pendent contractors are often employed for other tasks. It is not surprising, therefore, that in the law of contract, agency is all impor- tant, while the distinction between servants and independent contrac- tors has little significance, whereas in the law of tort the employer's liability turns primarily on the distinction between servants and inde- pendent contractors, and the doctrine of agency has little importance except in relation to torts connected with contracts or with the trans- fer of property. – 41 –
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