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 appointed 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 Sonia 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 breached these duties in her 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.