Agency problem: Difference between revisions

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 Above that threshold, this no longer holds: there is a hazy interregnum where lawyers know they can be paid handsomely, indefinitely, for carrying on an argument that most likely will never get to court, let alone final adjudication.
+===Service providers===
+Especially where you are dealing with investment banks as corporate service providers, you may see this sort of clause:
+{{quote|''The Agent may seek and rely upon the advice of professional advisers in relation to matters of law, regulation or market practice, and shall not be deemed to have been [[negligent]] or in [[breach of contract]] with respect to any action it takes [[pursuant to]] such advice.''}}
+The airily-advanced explanation is “look, we don’t make much money from this, and we haven’t got [[skin in the game]], so we don’t want to find ourselves facing a claim when we have done the diligent thing and sought legal advice. How can we be blamed?
+But your bad advice should not be someone else’s client’s problem. No one is stopping the agent getting whatever advice it wants, on its own dime, and at its own risk. It’s a free country. And no one is stopping the agent ''relying'' on whatever advice it gets. That it did get advice may even be (weak) evidence that it diligently discharged its duty and wasn’t, factually, at fault.
+But if the advice turns out to be wrong and the agent can disclaim its own liability, then the lawyers it instructed — for whom the client is probably paying — don’t acquire any liability in the first place.  ''But that’s why you pay lawyers'': so they can cover the agent’s sorry arse if their advice turns out to be wrong and their client — you, kind sir — goes on the warpath.
 {{Sa}}