“No word is more commonly and consistently abused in the English language than agency” . Although agency is an every day word whose meaning covers activities ranging from distribution outlets to service centres, it proves its real importance in the business and law context. In this context agency is defined as a fiduciary relationship between two parties which “results from the manifestation of consent by one person to another that the other shall act on his behalf and subject to his control, and consent to by the so to act” .
Agency law cannot function with out three parties being involved. These three parties include the principal, an agent and a third party. The function of an agent is to act on behalf of the principal when making contacts, receiving statements and making representations and to pay and receive money for the principal.
Travel Agents are obviously acting as an agent when selling or booking accommodation, travel etc for clients. The typical relationship between a customer and the Travel Agent consists of the customer being the principal and the supplier of the services, weather it be accommodation or a means of travel, as the third party. However Travel Agents can act on behalf of the provider, making the customer the third party. In either arrangement the Agent is still responsible to their principal under the common laws which govern agency.
Weather the Agent’s principal is their customer or the supplier, the Agent must maintain the same duties to either person. Agency relationships are considered as fiduciary relationships. As a fiduciary the agent is also governed by the terms expressly set out in the agency agreement. A failure to follow the duties set out in the agreement and those established by common law may result in the agency being terminated or the agent being sued for breach of contract. The six key duties of an agent require the agent to:
a. Follow the principal’s instructions.