14 Jun Example of Agency by Agreement
As a professional, I am well aware of the importance of creating high-quality content that is both informative and engaging to readers. In the world of law, one concept that is particularly important to understand is “agency by agreement,” which is a legal relationship that can arise between two parties in various situations. In this article, we will explore what agency by agreement is and provide an example to help illustrate this concept.
What is Agency by Agreement?
Agency by agreement is a legal relationship that arises when one person (the agent) has the authority to act on behalf of another person (the principal) in a particular situation. This authority is typically granted through an agreement, either express or implied, between the principal and the agent.
In order for agency by agreement to exist, there are three key elements that must be present:
1. Consent – The principal must give their consent for the agent to act on their behalf.
2. Control – The principal must have control over the actions of the agent, at least to some extent.
3. Fiduciary Duty – The agent must act in the best interests of the principal and must not take any actions that would harm the principal in any way.
Example of Agency by Agreement
To help illustrate the concept of agency by agreement, let`s consider an example. Suppose that you own a small business that sells handmade jewelry, and you hire a sales representative to help you sell your products at a trade show. In this scenario, the sales representative would be your agent, and you would be the principal.
When you hire the sales representative, you would provide them with instructions on what products to sell, how much to charge for them, and any other relevant details. You would also give them the authority to make sales on your behalf, and to collect payment from customers.
In this example, the three key elements of agency by agreement are present:
1. Consent – You have given your consent for the sales representative to act on your behalf at the trade show.
2. Control – You have control over the actions of the sales representative, as you have given them specific instructions on what to sell and how to sell it.
3. Fiduciary Duty – The sales representative has a fiduciary duty to act in your best interests, which means that they should work to maximize your sales and revenue at the trade show.
In conclusion, agency by agreement is a legal relationship that can arise when one person has the authority to act on behalf of another person. This relationship is typically established through an agreement between the principal and the agent, and there are three key elements that must be present: consent, control, and fiduciary duty. Understanding the concept of agency by agreement is important for protecting your legal rights and interests, especially when conducting business with others.