One of the most common, important, and pervasive
legal relationships is that of agency. In an agency relationship between two parties, one of the parties, called the agent, agrees to represent or act for the other, called the principal.
The
law of agency is an area of commercial law dealing with a contractual or quasi-contractual, or non-contractual set of relationships when a person, called the agent, is authorized to act on behalf of another (called the principal) to create a legal relationship with a third party
- Therfore: the principal, expressly or impliedly, authorizes the agent to work under his control and on his behalf.
- Because an agent derives the authority to enter into contracts from the principal and because a contract made by an agent is legally viewed as a contract of the principal, it is immaterial whether the agent personally has the legal capacity to make that contract.
- An agency relationship can be created for any legal purpose. An agency relationship created for a purpose that is illegal or contrary to public policy is unenforceable.
- 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.