Quick question but what am i supposed to do with it. Is it an important item to be used in Act 3?

It's a quest from the Duke, he asks you to kill him (he is another leader of the Cursed Flame, like the chief orc from Act 1), in return for money. But if he gets mad because of something you can do in another quest (I don't want to give the spoiler, there is enough game-killing spoilers already in this forum), he doesn't want to even speak to you.

I don't know if he will speak to me again further in the game.

Yes, I believe he will start talking to you again in the end.