Agency law and e-business in the global economy

Crossing Borders: Agency Law and the Global Economy

The Internet has an effect on almost any aspect of business. It affects marketing, cash flow, and legal issues. The advent of e-business has caused many businesses to re-examine many legal issues regarding international trade, particularly in the area of dispute resolution. The following will briefly examine how e-business and the global economy have changed the way many think about agency law.

Applications of Agency Law in the Business Environment

Agency law represents a specific set of concepts and doctrines that are applicable to a number of situations in which a person's conduct can have ramifications for the legal position of an entity (Demott, 2006). The actions of a single employee can have an impact on agency liability. Agency law defines the circumstances under which a relationship can be classified as an agency relationship, rather than as the actions of individuals. This can arise from the creation of rights and obligations regarding a transaction, the agent's knowledge of the action, and amount of liability that the agency derives from the acts of the individual.

Agency law also determines the rights and duties between the principal and agent (Demott, 2006). As one can see, agency law serves as a means to define legal relationships between an individual and a business entity. The International market was once only the realm of the large corporate entity and had a fairly consistent formal set of rules. The Internet has meant the entrance of many small and medium sized businesses into the International marketplace. The entrance of different types of business entities has resulted in a need to find new definitions for business relationships.

When two entities are similar, then the transaction and relationships are easier to define than if the two entities have different structures and philosophies regarding their employees. Agency law varies from country to country. The advent of e-business has complicated agency law in many ways. For instance, what happens when an employee uses the company email to send out illegal personal messages? How much liability does the company have for consequences of the act? How much liability do employees have for the actions of upper management? The issues surrounding questions such as this are many, and straight answers are few.

E-business and the Global Legal Environment

These differences in the application of agency law in the e-business environment have led to the formation of several sets of International laws and agreements. The Uniform Electronic Transactions Act (UETA) applies to transactions where the computer itself acts as an agent and responds to consumer requests, such as an auto responder. The federal Electronic Signature in Global and National Commerce Act defines the computer as a tool that responds to the actions of a person (Demott, 2006). There are many sets of International agreements that have arisen from e-business and agency law. The American Arbitration Association is an organization that helps businesses operate under the relevant bodies of legal agreements that may impact a transaction (AAA, 2006).

The effectiveness of any legal doctrine is in its ability to produce outcomes that are acceptable to all parties. The outcomes must agree with the precepts of basic human morality and the common good. Legal doctrines arise from necessity. Legal doctrines are dynamic and must be constantly updated to meet the needs of society. The only thing for certain is that agency law will continue to change as these changes in society and the global marketplace reach maturity in the future.