Agency
Law Firm

An agent is a person who represents another person or company in a legal capacity, such that they are able to bind their principal in a legal relationship provided they act within the scope of their agency. The principal is the property party to sue or be sued rather than the agent. Agency agreements need not be in writing.

In order for a person to act as an agent, they must have permission from the principal, however this consent may be implied. A principal is able to ratify a transaction entered into by an agent without authority at their election, and where the principal declines to do so, the agent is liable on the transaction.

Agents may be:

1. universal;
2. general; or
3. special.

Universal Agents are empowered to act for their principal in all matters, and include company directors. General agents act for their principal in specific classes of transactions, such as accountants, solicitors and bankers. Special agents are authorised to deal with a single specific transaction on behalf of their principal.

Del credere agents guarantee payment of transactions gained for the principal in exchange for an additional commission.

Actual authority of the agent to act for the principal exists where there is an express agreement them or the actual authority is implied. It may be a custom that an agent has the power to bind the principal in particular transactions and third parties are generally entitled to rely on this to bind the principal. For instance, a third party may reasonably expect a solicitor involved in negotiations to bind their principal.

Apparent authority arises where representations are made that a person has power to act for the principal when in fact they do not and where an agents power to act for the principal is revoked and third parties are not notified.