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Commercial Law Functions

Table of Content

  1. Introduction


The agency law is the law that marks the contract between the two bodies of the organisation in the organization or society which have the authority to make the situation of the contract favourable or break the situation. The following work of the report support the smooth operation of the law in the support of the organization and the people in the group of the agency law. It is assertive that the support of the law in the society is prime importance and the maintaining of the law is most assertive. The study explains an issue and elaborates the functions of Agency law and the way it would ensure justice made to DNG Binto regarding the purchase of ‘compact wheel loader’.

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Identification of the concerned issue

The issue that had been under much concern in order to identify the application of agency law is much of a misunderstanding that had risen due to Abigail’s inability to convey full information to DNG Binto about their contract with Caterpillar Inc. regarding the purchase of about $13.5 million including two distinct equipments- ‘Hydraulic Mining Shovel’ and ‘compact wheel loader’. Abigail failed to inform the company DNG Binto about their purchase of compact wheel loader which had been a big mistake and therefore, the company is bound to take legal action against the misunderstanding. The issue had been a sincere one when the Caterpillar Inc. claim money from the DNG Binto as per the contract signed. DNG Binto had claimed an error of mislead by Abigail being an agent had to take full responsibility of $13.5 million since the employee of the company signed the contract on their behalf and the company is completely liable to pay off the debt. Though the information failure is not intentionally done by Abigail yet it would be treated as misconduct since the failure of information led the company pay off extra $1.5 million for the equipment ‘compact wheel loader’.


As per the Commercial Agents and Private Inquiry Agents Act (2004), any commercial agent could be defined as ‘the holder of master licence or operator license with respect to one or more commercial agent activities’. The activities of commercial agent include collection of debts, serving process as well as repossession of goods. As per the principles of this law, it could be stated that any individual who confers upon any agreement signed between the parties as an act of authority on behalf of the company in order to create or affect legal rights as well as duties between third parties and that agent.

The assertive effect of the law of agency marks that the scope of the different operation of the organisation is pr contract is of prime importance and needs to be ascertained by the people in the scope. Breaking the code of practices in the contract may lead to the failure of the job and the breaking of the contract. The law is applicable in order to solve this issue since it is a matter of the functions performed by the agency on the official grounds despite being unintentional in her misconduct. As per the Real Estate and Business Agents Act (1978), every agents must be trusted on official grounds and the company shall be dependent on their activities despite any misconduct is observed. In the context of the issue, the company DNG Bnto shall claim the extra money to be charged on their behalf as she had failed to explain the logic initially. The Board of Directors have full authority to claim against the Abigail's misconduct in order to refuse payment to Caterpillar Inc. According to the law, there must be relevant code of conduct of agents in terms of conveying any kind of information to the company so that the company and the agent shall not be deceived by their own behaviour and conduct.

Actual effect and following of the law

The actual effect and the following of the contractual law suggest that the use of the contract can be only viable if the use of parties and the bodies taking part in the contract does not fail to comply with the effect of the organization. According to the views of Li et al. (2016, 138-150), it can be so suggested that the use of the organization and the use of the support of the views and ideas, it is possible to understand that the breaking of the contract can be marked as the void act in the contract and may lead to the paying of compensation by the breaking part (Viven-Wilksch and Jessica 2015, 89-92). The operation of the organization and the mandating of the contract is best understood with the support of the truth and the positive act of the organization. The operation of the contract is best mediated by the parties of the society bounded by the act the act of the contract. In the views of Tarr and Julie-Anne (2016, 10-22), the use the use of the contract in legal format is only seen to be possible as the support of the parties need to be possible if and only if the truth a truth prevails in the contract.

In the case study, Abigail is the purchasing manager of the DNG Binto, a resource based company in west of Australia. The company resolved that the construction phase of the company will be shifted to production phase in the coming years. In the words of Chalmers et al. (2013, 517-523), the support of the contract among the organization and the managers marked the situation which determines the situation in which the purchase managers need to be assertive in the format that she should be informative to the organization workers and the managers of the organization regarding any purchase or production related work. As per the observations of Wyburn and Mary (2014, 101-121), the smooth operation of the Agency law is determined with the conduct of the agent Abigail relating to the case study. The act of breach of duty has been a criminal action under the Western Australian law on agencies and could even lead to a ban on her license being an agent.

Due to this kind of action, the agent might get imprisoned and her license could be sacked off. According to the views of Bowman et al. (2014, 160), in Spite of having such a conduct unintentionally, it would be the authority of DNG Binto to claim charges against her misconduct that had affected company’s reputation and put them in a situation to compensate. As per their thoughts, they had been deceived by Abigail since she forgot to inform them about the contract where purchase of both the equipments had been mentioned in details. Her agency criteria did not fulfil and remained vague in front of the Board of Directors for her casual and inattentive attitude towards signing of any contract and forgetting to infirm the company’s higher authority.

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In words of Cameron et al. (2014, 118-132), according to the Real Estate and Business Agents Act (1978) both agencies as well as organisations are supposed to take reasonable actions for protecting personal information and informing about the outside happening incidents. It strictly mentions the prohibitive nature of the act towards the misuse of the trust factor between the organisations and the employee working as an agent. The companies like DNG Binto which are somewhat dependent on the agencies for enhancing the production or construction business subjects to cases such as loss due to interference from any unauthorised access, disclosure and modification.

Logical application of the law

The application of the law and the contract in terms of the mentality of the parties is marked as the support of the organization (Toole and Kellie 2014, 268). The contract between the two parties is maintained only when there is support of truth in the contractual bond. The support of the bond in the case study is present but the valuing of the contractual bond is not maintained by the purchase managers of the organization (Newman and Linda 2016, 20). The support of the purchase managers in the organization is determined by the work of Abigail. Abigail in the case study did mention the work of the organization and properly closed the deal with Caterpillar Inc. However, she forgot to mention her employer about the bond she entered in with Caterpillar Inc (Issacharoff and Samuel 2013, 561). Thus, the logic behind the contract in accordance to the case study is, the managers of the organisation are liable to pay the Caterpillar Inc. the required or the claimed amount in terms of respecting the code of conduct in the contract that Abigail went into with Caterpillar Inc.


The study essentially deals about revealing a case study on an agent who performed a breach of duty in her work being inattentive towards conveying appropriate information of a contract of purchase signed. This has affected the company adversely since it had to pay an extra $1.5 million for equipment named ‘compact wheel loader’ which is considered to be a breach of act. Hence the study entails relevance of some agency laws which could significantly help the company out of this action by claiming charges against Abigail the purchasing manager.


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  • Brown, A. J. "Australian whistleblowing law reform debate hots up." Governance Directions 66, no. 3 (2014): 160.
  • Cameron, Jenny, Katherine Gibson, and Ann Hill. "Cultivating hybrid collectives: research methods for enacting community food economies in Australia and the Philippines." Local Environment 19, no. 1 (2014): 118-132.
  • Chalmers, Jenny, Natacha Carragher, Sondra Davoren, and Paula O’Brien. "Real or perceived impediments to minimum pricing of alcohol in Australia: public opinion, the industry and the law." International Journal of Drug Policy 24, no. 6 (2013): 517-523.
  • Issacharoff, Samuel. "Litigation Funding and the Problem of Agency Cost in Representative Actions." DePaul L. Rev. 63 (2013): 561.
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  • Toole, Kellie. "Law reform: The making of prosecutorial decisions in Australia." Alternative Law Journal 39, no. 4 (2014): 268.
  • Viven-Wilksch, Jessica. "The adventures of good faith: can legal history and international developments provide guidelines for Australia?." Alternative Law Journal 40, no. 2 (2015): 89-92.
  • Wyburn, Mary. "Debt agreements for consumers under bankruptcy law in Australia and developing international principles and standards for personal insolvency." International Insolvency Review 23, no. 2 (2014): 101-121.
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