Advise to Crumbly Caravans Ltd - Coursework Example

The Scottish Law of Contract, in regard to the law of agency, defines the relationship between a principal and an agent, as well as that between an agent and a Third Party, and gives clear guidelines on how each party should act towards each other, with clear stipulations of the duties and responsibilities of either the principal to the agent, agent to the principal and agent to the Third Party. The most fundamental duty of an agent towards the principal is that; the agent has a duty to follow the instructions issued by the principal to the agent fully, and perform them as instructed (Macgrego & Davidson, 2008 p17).

Further, in addition to this duty, the Scottish Laws of Contract, in regard to agency also provides for the adherence to the commercial agents Regulations of 1993, which is related to the fulfillment of the European directive, requiring that a commercial agent should comply to, and perform reasonable instructions that are given by the principle (White & Willock, 2007 p22). However, the most fundamental aspect of the duties of the agent to the principal is that; the Scottish law requires that the instructions issued by the principal should be clear and unambiguous, providing that an agent is not liable for any instructions that are not clear, or which the principal may have issued ambiguously.

The ‘Crumbly Caravans Ltd.’ case, is a case of a Third Party affected by the relationship between the principal,and the agent,. The law provides that an agent must not disobey the reasonable and material instructions that have been issued by the principal, and in cases where the agent then violates this provision, then the agent becomes liable for any loss that might be suffered by the principal (Mcbryde, 2007 p77). The agent, in addition to the duty of following and performing the instructions issued by the principal, is required to perform the duty of skill and care towards the principal, where the agent must not act in a way that can cause loss to the principal (Macgregor, 1997 p272).

Although the duty of skill and care may vary, it expressly requires the adherence and performance of the instructions given to an agent by the principal, in such a way as to avoid causing any loss on the side of the principal (White & Willock, 2007 p9). Nevertheless, the most significant rules applying in the Scottish law of contract in regard to the relationship between an agent and a principal are fiduciary duties, which requires that the agent should always act in such a way, that his actions benefits the principal (Mcbryde, 2007 p72).

Therefore, the agent is required to act in a way consistent with the requirement of the principal, especially regarding the duty of disclosure, where the agent is always required to disclose that he is acting on behalf of the principal (Macqueen & Thomson, 2007 p29). Another of the fiduciary duty of the agent to the principal is the duty to be loyal, and to negotiate appropriately with a Third Party where negotiations are applicable, however with a duty to conclude the deal in accordance with the instructions of the principal.

Further, the agent is under duty to communicate all the information available to him to the principal