Lesson 1, Topic 1
In Progress

9.1 Meaning and nature of the agency contract

Agency refers to a fiduciary relationship between two parties where one party (the agent) is authorized to act on behalf of and make decisions for another party (the principal). The agent’s actions and decisions are binding on the principal, and this relationship is typically governed by a contract or agreement.

Agent: The agent is the individual or entity appointed or authorized by the principal to act on their behalf. The agent’s actions may include making contracts, decisions, and transactions within the scope of their authority.

Principal: The principal is the party who grants authority to the agent and entrusts them with the power to represent their interests. The principal can be an individual, a company, or any other legal entity.

Characteristics of agency

  • The agent performs a service for the principal
  • The agent represents the principal
  • Acts of the agent affects the legal position of the principal the agency relationship differs from trusts and bailment.

 

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