Agency by agreement, also known as agency by express agreement, is a legal concept that refers to an agreement between two parties where one party, the principal, authorizes another party, the agent, to act on their behalf. The agreement is usually in writing, although it can also be verbal or implied.
In an agency by agreement relationship, the agent is given the power to carry out certain actions on behalf of the principal. This could include selling products or services, negotiating contracts, or making important decisions related to the principal`s business or personal affairs. In exchange for their services, the agent is typically compensated in some way, such as through a commission or salary.
It`s important to note that an agency relationship can only exist if both parties agree to it. If the principal does not authorize the agent to act on their behalf, or if the agent exceeds the scope of their authority, the agency relationship may be terminated.
One of the key benefits of agency by agreement is that it allows the principal to delegate tasks and responsibilities to someone else. This can be especially beneficial for small business owners who may not have the time or resources to handle every aspect of their business on their own. By appointing an agent, the principal can focus on other important tasks while still ensuring that their business affairs are being handled competently and professionally.
Another benefit of agency by agreement is that it provides a clear framework for the agent`s actions. By setting out specific tasks and boundaries, the principal can ensure that the agent is working towards their goals and objectives. This can help to prevent misunderstandings or conflicts that might arise if the agent was left to their own devices.
In conclusion, agency by agreement is a valuable legal concept that allows individuals and businesses to delegate tasks and responsibilities to others. By appointing an agent, principals can ensure that their affairs are being handled professionally and efficiently, while agents can benefit from the opportunity to earn income and develop their skills. If you`re considering entering into an agency relationship, it`s important to consult with a legal professional to ensure that your rights and obligations are fully understood and protected.