Agency

An agency is a legal entity that acts on behalf of another person or group and has the authority to make decisions and take actions on their behalf. The relationship between the agency and the person or group it represents is known as the principal-agent relationship.

Types of Agency

There are several types of agency, including:

• Universal Agency: In this type of agency, the agent is authorized to perform any legal action on behalf of the principal.
• General Agency: A general agent has the authority to perform all acts associated with a particular business or trade on behalf of the principal.
• Special or Limited Agency: In this type of agency, the agent has limited authority to act on behalf of the principal and can only perform specific tasks.

Elements of Agency

The key elements of an agency relationship include:

1. Consent: Both the principal and the agent must give their consent to establish an agency relationship.
2. Authority: The principal grants authority to the agent to act on their behalf.
3. Fiduciary Duty: The agent has a legal obligation to act in the best interests of the principal and not pursue personal gain at their expense.
4. Control: The principal retains the right to control and direct the activities of the agent within the scope of the agency relationship.

Functions of an Agency

The functions of an agency include:

• Representation: The agent represents the interests of the principal in various transactions and negotiations.
• Contractual Obligations: The agent may enter into contracts on behalf of the principal, binding them to legal obligations.
• Decision-Making: The agent may make decisions on behalf of the principal, within the scope of their authority.
• Accountability: The agent is responsible for keeping the principal informed about actions taken and providing necessary reports.