APPRAISAL OF PRINCIPAL AND AGENT RELATIONSHIP UNDER NIGERIAN LAWS
1.1 OVERVIEW OF THE SUBJECT MATTER
The employment of agents in commercial transaction has assumed great importance in modern day business practiced. This has been dictated by the complexities of modern specialized more handle transaction and practice which dominate the commercial arenas of Nigeria, as on other developing countries of the World. As a result of the advancement in the field of technology and communication, it is now possible for people in distant places to transaction business with Nigerians. Distance at times present some difficulties and therefore could be disadvantageous to the astute business man. Consequently, he ( the principal) find it necessary to appoint an agent in such distant place where he has business interest in like manner, Nigerians who are in business with people from other countries usually appoint agents in such foreign countries where they have their business.
Legally, the Word Agency has no comprehensive definition that is universally acceptable unlike other subject in law. It is better described than define.
Professor E.G. Akaniro defines agency as:
“The legal relationship which arises between a principal and an agent whereby the agent is expressly or impliedly authorized legal relations with the third parties”
The above definition is quite instructive but with due respect, it is necessary to point out that not much reliance can be placed on it because no reference is made about the segment of the law the author has in mind. Also, the nature of the relationship is not explicit because nothing is said about the disposition of the parties.
As a result of these some other attempts made by other eminent scholars would be considered. Adesanya and Oloyede submitted that agency is:
“ A consensual relationship existing between two parties by which one, the agent is expressly or impliedly authorizes to act on behalf of another the principal in any dealing with the third parties”
In this case Adesanya and Co have cleverly brought in the idea of consent but it is necessary to observe that the issue of consent may not significantly apply in certain classes of agency namely; agency regarding marriage at least in our traditional setting and agency by necessity. Adesanya and Co’s submissions is in pari- material with the following definition made by Bowstead:
“Agency is the relationship that exist between two persons of which the principal expressly or impliedly consents, that the other agent similarly consenting should represent him or Act on his behalf”
For the purpose this essay we shall rely on two very exhaustive definitions. The first is the home base exposition by Dr Igweike K. I. Where he explains that an agency relationship can be described as a special kind of contract or fiduciary relationship or simply as a grant of authority relating to the right and liabilities as to one person by the Act of another. Consequently, the Law on the subject deals primarily with the relationship which arises where one person expressly or impliedly employs another or is by law seemed to have employed such a person to perform some tasks for and on his behalf.
Actually Igweike’s rendition paraphrased above looks like a rigmarole but it is very clear that the idea is to bring out all the necessary characteristics of agency.
In the second example, Fridman goes directly to say that:
“ Agency is the relationship that exist between two person where one called the agent is considered in law to represent the other called the principal in such a way as to be able to affect the principal legal position in respect of strangers to the relationship by the making of contract on the disposition of property”
Having achieve a reasonable definition of the terms, we now focus attention on the second limb of the introduction sub-heading which calls for the Raison detre of Agency.
As far as we know, it is quite clear that the employment of agency grow out of the impossibility of survival of do it alone syndrome in business.
Thus in order to respond adequately to the unprecedented growth in human population and mixing of human species with their resulting diverse needs, contacts and contracts trade and business generally, hence become astoundingly complex, sophisticated and globalized. No wonder why Okoye, C.A has emphasized that agency has become a “sort of relief” In the tedium arising from modern commercial activities.
Some modern business required almost ubiquitous performance, principal must necessarily use agents to serve as veritable conduit pipes for reaching their numerous scattered customers. And in such a tripartite arrangement, the agent normally phase out once they have completed the transaction between their principals and the third parties.
However, this phasing out as we known cannot work in some cases because the law does not allow agent to escape liability if they engage in any tortuous or criminal acts.
Based on the great need of agency in business transactions therefore, this operation is determined only by laws, which have no relevance to more social and obligations outside the arm bit of law.
In Nigeria one of the most important of these laws is the factors Act of 1889, which applies to the states in the former northern and Eastern Regions as a law of general application inherited from Britain. In the state of the formal Western Region including Lagos a home based law known as the mechantile Agent law of 1958 operates. In the subsequent pages attempt will be made to give details of the importance of the relationship, objective and scope of the study.
1.2 RESEARCH QUESTIONS AND PROBLEMS
Since the relationship of the principal and the agent in Nigeria have been under close scrutiny by the society. A lot of question have been raised on the minds of people on this issue and with the fact that there is still the occurrence of breach of duties encounter by them in their dealing with each other and that of the third parties. During the course of the research the following questions will be looked into
- Does the relationship between the principal and agent enhance the image of commercial activities in the country.
- Does it create a better environment between the principal and the agent in the commercial world.
- Do they own some obligations towards each other
- What happens if there is a breach of this obligations
- What kind of responsibility do they want from each other in the relationship
- Does the amount of responsibility constrain with their level of profit
- Are they aware of what they want
- What forms of damages are done to their relationship as a result of their irresponsibility
- How are they parties remedies themselves in case of the breach of their duties.
1.3 THE FOLLOWING ARE THE OBJECTIVES/ PURPOSE OF THE RESEARCH
- To ascertain whether what the parties claim to do is actually what they do.
- To know whether the parties are satisfied with the level of responsibility or duty. They rendered or not
iii. To know if those effort have gone any way to alleviate the problems of the people.
- To know the cause of incapacity of the agent and the principal
- To know the effect of incapacity of the agent and principal on the relationship between them
1.4 SCOPE OF THE STUDY
During the course of this study, emphasis will be on the broker who is an agent operating under the guidance of the Nigerian stock Exchange.
This institution was chosen because of her long acquaintance with trade in Nigeria.
As the most enhanced institution commercial activities in Nigeria. The operation of this institution have gone along way to effect lives of the people of Nigeria.
As the most enhanced institution in commercial activities in Nigeria. The operation of this institution have gone along way to effect lives of the people of Nigeria.
1.5 RESEARCH HYPOTHESES
The following hypotheses are formulated:
- The people are satisfied or not satisfied with the level of responsibility of the broker i.e. the agent
- Principal and agent relationship has effect or no effect on the image of the institution or the nation at large
- If the relationship has or has not create a better social environment between the principal and the agent
1.6 SIGNIFICANCE OF THE STUDY
This study will be of relevance to the government, academics and the entire Nigerian society.
For the government, this study will enable them to make policies in order” to ensure that the principal and the agent conduct their affairs according to the tenet of the contract entered into by them and establish guidelines on how they should fight their cause.
This study will also be relevance to academics and to the entire public. The issue of principal and the agent relationship touches every live in Nigeria. Without it, the country will be paralyzed in terms of trade activities.
1.7 LIMITATIONS OF THE STUDY
In course of undertaking this research project. I was faced with a lot of constraints. Among which are:
- Time and financial constraints. All these tried to slow down the pace of the research. However, by the share determination of mine, this constraint was overcome.
- The difficulty of obtain information from the Nigerian stock Exchange due to security reason. Adequate and complete information are hardly obtained from them. A lot of bureaucracy was involved before information could be given. They only released those they felt would be less harmful to them.
- The difficulty of obtaining information from the business communities partly because of their level of literacy. Getting some of the businessmen at home was another thing, thereby resulting to visiting them in town in which they are staying.
. Okay Achieve Commercial Law in Nigeria P. 106
 . E.G Akaniro, Business Law in Nigeria (1997) P.77
 M.O. Adesanya and E.C. Oloyede Business Law in Nigeria (1983) P 117
 . Key noed, F.M.B. and davenport. Bowstead on Agency (1972) 14th edn p.1
. K.I. Igweike Commercial Law in Nigeria (1980) P.3
 . Fridman, Law of Agency (1971) butterworth London, P.5.
. C.A. Okoye “ Agency” The Extent of principal Liability for the Act of the Agent (1983)4th edn P.2
 . Statute of General Application, Which came into force on 1st day of January 1900
|BANK||ACCOUNT NAME||ACCOUNT NUMBER|
|DIAMOND BANK||FREEMANBIZ COMMUNICATION||007 031 2905|
|FIDELITY BANK||FREEMANBIZ COMMUNICATION||560 028 4107|
|GTB||FREEMANBIZ COMMUNICATION||013 772 5121|
|ZENITH BANK||FREEMANBIZ COMMUNICATION||101 326 3297|