Business Case Study: Peter's Agency Relationship With Alice

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Agency 1A. In the event that Peter is terminating his agency relationship with Alice he should do so in line with the agency contract that first established their relationship. Peter reserves the right to retract his agency relationship with Alice any time but he will be held liable for damages because his decision amounts to violation of the contract that he fashioned with Alice. Peter is supposed to pay Alice $1,080 (6% of $18,000) as this is the amount that the Principal would have earned if he had proceeded with the contract. This serves to indemnify Alice for the commission she was deprived by Peter’s action to rescind the contract without issuing any notice thus compensating the agent for her efforts and for specific performance. 1B. Alice, the agent has the duty to be loyal and act solely in the interest and for the benefit of Peter, her principal. As such, Alice is prohibited from acting as a representative of two principals in one transaction unless both are aware and consent to the same. Alice will not be able to obtain the…show more content…
Capital is a major factor for decision making. Since the business involves a group then the three forms of business exposes the group to a greater capital availability. The liability of members is also an important factor. The partnership offers unlimited liability to the members of the partnership while the corporation and Limited Liability Company allows the members limited liability and thus their personal assets cannot be interfered with in the event of a liability. The decision making process is for the business associations but the input of all members results to the making of good and informed decisions. Finally, the taxation practices for various forms of associations informs the decision. Corporations are often taxed twice whereas the LLC and partnership business is taxed

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