Law of Agency

Agency is an area of law dealing with a contractual or quasi-contractual relationship between at least two parties in which one, the principal, authorizes the other, the agent, to represent her or his legal interests and to perform legal acts that bind the principal. The agent has a fiduciary relationship with and acts for best interests of the principal.

Table of contents

1 Types of Agency
2 Creating Agency
3 Agency relationships

Types of Agency

Universal Agency provides broad authority for agent to act on behalf of principal
General Agency limits agaent authority to a particular type of transaction or business; agent may bind principal
Special Agency is also called "limited agency"; agent is not able to bind principal

Creating Agency

Express Authority is given in a written contract that defines positions, duties, and expectations of parties

Implied Authority is the agent's right to act where it is customary or the norm in the specific business context

"Ostensible" Agency is when actions cause a third party to assume someone is an agent

Agency by Estoppel is created when an agent's unauthorized activity causes a third party to believe the agent has that authority.
Agency by Ratification occurs when the unauthorized action of the agent is accepted by the principal after the fact

Agency can be created in a variety of ways, such as through the grant of a power of attorney also known as a mandate in civil law jurisdictions, it can also be implied from the conduct of the parties.

Agency relationships

Agency relationships are common in many professional areas.

employment procurement (modelling agency)
real estate transactions (real estate brokerage, mortgage brokerage)
financial advice (insurance agency, stock brokerage, accountancy)
contract negotiation (business management)

the negotiation of entertainment and sports deals and in many day to day transactions where one person (the "agent") is allowed to stand in for another individual to fulfill their wishes. Models, actors, and athletes have agents who secure opportunities and benefits for them.

Agents can represent the interests of one party, or they may represent the interests of several, conflicting or potentially conflicting parties. In the case of such dual agency the agent must either disclose information received by one party to the other or act in a limited agency capacity to prevent a situation where the agent's loyalty to the multiple principals is compromised.