Agency Law - Agent Law

What is Agency Law?

Agency law refers to the relationship between a person, or “agent,” that acts on behalf of another person, company, or government, usually called the “master” or “principal.” An agency is formed when a principal asks an individual to make a delivery or names someone as an agent through a contract leading to the responsibility of the principal for actions made by the agent while the agent’s actions are akin to those of the principal. This form of agency can be, and often is, enforced by written agreements made through a power of attorney.

Creation of Agency Relationship

An agency relationship is generated by the consent of both the agent and the principal. No person can unwittingly become an agent for another. A written contract is common, but not necessarily essential when it is clear that both parties intend to act in their respective principal and agent roles. The intent of the parties can be inferred from their words or implied by their actions.


An intricate element of the principal-agent relationship is the concept of control. The agent agrees to act under the direction of the principal. The agent's authority may be actual or apparent. If the principal deliberately advises express and implied powers to the agent to act for him or her, the agent has actual authority. When the agent exercises actual authority, it is as if the principal is acting, and the principal is bound by the agent's acts and is legally responsible for them.  If the principal either knowingly or mistakenly, authorizes the agent or others to assume that the agent holds authority to carry out specific actions when such authority does not exist, this is known as apparent authority. If other persons believe in good faith that such right exists, the principal remains liable for the agent's actions and is unable to rely on the defense that no actual authority was established. The scope of an agent's authority, regardless of whether it is apparent or actual, is considered in determining an agent's legal responsibility for his or her actions. An agent cannot be individually liable to a third party for a contract the agent has entered into as a representative of the principal if the agent acted within the scope of authority and contracted as agent for the principal. If it so happens that the agent exceeded his or her authority by entering into the contract, the agent is then financially responsible to the principal for failing to uphold the fiduciary duty.


Termination of the agency relationship must be in accordance with the agency contract that initially fashioned the principal-agent relationship. A principal can retract an agent's authority at any time, but may be liable for damages if the termination violates the contract. Other happenings such as the death, mental state, or bankruptcy of the principal also end the principal-agent relationship by operation of law.

For more information about agency law, you may review the materials found on this page or contact one of the attorneys listed on our Law Firms page.


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Agency Law - US

  • Agency Law - Wikipedia

    The law of agency is an area of commercial law dealing with a contractual or quasi-contractual, or non-contractual set of relationships when an agent is authorized to act on behalf of another (called the Principal) to create a legal relationship with a Third Party. Succinctly, it may be referred to as the relationship between a principal and an agent whereby the principal, expressly or impliedly, authorizes the agent to work under his control and on his behalf.

  • Agency Relationships with Organizations Representing Federal Employees and Other Organizations

    The regulations in this part apply to all Federal executive branch departments and agencies and their officers and employees.

  • Agency Rules, Opinions, Orders, Records, and Proceedings

    For purposes of this section - the term ''agency'' means any agency, as defined in section 552(e) [1] of this title, headed by a collegial body composed of two or more individual members, a majority of whom are appointed to such position by the President with the advice and consent of the Senate, and any subdivision thereof authorized to act on behalf of the agency.

  • Duties of Agents and Principals

    An agent who is acting without any form of payment must show the same standard of care as if he/she was dealing with their own affairs. That is, the agent must exercise reasonable care and skill in the matter. If the agent is being paid then the standard of diligence expected is even higher.

  • Foreign Agents Registration Act (FARA)

    The Foreign Agents Registration Act (FARA) was enacted in 1938. FARA is a disclosure statute that requires persons acting as agents of foreign principals in a political or quasi-political capacity to make periodic public disclosure of their relationship with the foreign principal, as well as activities, receipts and disbursements in support of those activities. Disclosure of the required information facilitates evaluation by the government and the American people of the statements and activities of such persons in light of their function as foreign agents. The FARA Registration Unit of the Counterespionage Section (CES) in the National Security Division (NSD) is responsible for the administration and enforcement of the Act.

  • Law of Agency - Overview

    Under the law of agency, if a person is injured in a traffic accident with a delivery truck, the truck driver's employer may be liable to the injured person even if the employer was not directly responsible for the accident. That is because the employer and the driver are in a relationship known as principal-agent, in which the driver, as the agent, is authorized to act on behalf of the employer, who is the principal.

  • Responsibility of Principal for Act or Omission of Agent

    When construing and enforcing the provisions of this chapter, the act, omission, or failure of any agent, officer, or other person acting for or employed by any packer, any swine contractor, and any live poultry dealer, stockyard owner, market agency, or dealer, within the scope of his employment or office, shall in every case also be deemed the act, omission, or failure of such packer, any swine contractor, and any live poultry dealer, stockyard owner, market agency, or dealer, as well as that of such agent, officer, or other person.

  • Uniform Power of Attorney Act - Standards for Agent Conduct and Liability

    The catalyst for the Uniform Power of Attorney Act (the “Act”) was a national review of state power of attorney legislation. The review revealed growing divergence among states’ statutory treatment of powers of attorney. The original Uniform Durable Power of Attorney Act (“Original Act”), last amended in 1987, was at one time followed by all but a few jurisdictions. Despite initial uniformity, the review found that a majority of states had enacted non-uniform provisions to deal with specific matters upon which the Original Act is silent. The topics about which there was increasing divergence included: 1) the authority of multiple agents; 2) the authority of a later-appointed fiduciary or guardian; 3) the impact of dissolution or annulment of the principal’s marriage to the agent; 4) activation of contingent powers; 5) the authority to make gifts; and 6) standards for agent conduct and liability.

Organizations Related to Agency Law

  • Commercial Law League of America (CLLA)

    The Commercial Law League of America is a respected organization of attorneys and other experts in credit and finance actively engaged in the field of commercial law, bankruptcy and insolvency. Since 1895, The CLLA has been associated with the representation of creditor interests, while at the same time seeking fair, equitable and efficient administration of bankruptcy cases for all parties in interest.

  • DOJ - Office of Information Policy (OIP)

    The Office of Information Policy (OIP) is responsible for encouraging agency compliance with the Freedom of Information Act (FOIA). OIP develops and provides guidance to agencies on questions relating to application of the FOIA. It publishes the Department of Justice Freedom of Information Act Guide, which is a comprehensive treatise addressing all aspects of the FOIA, as well as FOIA Post, which is an online newsletter addressing FOIA issues of current interest. OIP regularly conducts a variety of training programs for FOIA personnel across the government including specialized agency programs.

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