Sonia owns a small bakery business, which has been growing exponentially as her baked

products were well received by the market. Sonia also earned positive publicity as she

sold her baked products at a substantial discount to various local nursing homes as

a form

of corporate social responsibility. With the increasing volume of baked products and also

the increasing number of nursing homes that she has to deal with, Sonia decided to

appoint an assistant to help her with this aspect of her business.

Sonia a

ppointed a fresh business graduate called Vanessa to handle all the dealings with

the nursing homes. As Sonia wanted to ensure that the nursing homes were well taken

care of, she expressly instructed Vanessa to ensure delivery to the nursing homes within

three working days of their orders. After her first month in this role, Vanessa realised

that the workload was significant and tedious, and so, she decided to hire (without

informing Sonia) some students looking for part

-time work to help her with the more

menial tasks of liaising with the nursing homes and arranging for delivery to them.

On one occasion, as Vanessa had a personal event that she was attending, she decided to

take some of the baked products to bring to her event, without first informing Soni

a nor

paying Sonia for them. Vanessa had worked hard for the business, and therefore she felt

that she should get some special benefits in return.

When Sonia did an end-

of-year audit on Vanessa's work, Sonia discovered

that Vanessa

had failed on a number of occasions to deliver the baked products to the nursing homes

within three working days. Sonia also found out that Vanessa had made some basic errors

whereby some orders were not fulfilled as Vanessa had forgotten to process them.

Furthermore, Vanessa sometimes used her personal bank account to receive payments

from the nursing homes for the sale of the baked products.

Discuss the

duties of an agent

(which are owed to the principal)

, and analyse whether

Vanessa

has br

eached these duties in h

er relationship with Sonia

based on the given

scenario.

In your answer, you should also define the concept of "agency" and identify

who is the principal, agent and third party (or parties) in this scenario.