Understanding Agency Relationship

Summary

An agency relationship involves a principal and an agent, where the agent acts on behalf of the principal. Key elements include consent, control, fiduciary duty, authority, and accountability. Agency can be created through mutual consent, with the principal having control over the agents actions. Termination can occur by mutual agreement, fulfillment of purpose, expiration, revocation, or due to death or incapacity. Understanding these aspects is crucial for navigating legal and business environments.

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Give me illustrations
Certainly! Here are some illustrations to explain the "test of agency":
*. Employer-Employee: An employee acts as an agent for their employer when performing job duties, with the employer having control over the work performed.
*. Real Estate Agent: A real estate agent acts on behalf of a client to buy or sell property, having authority to negotiate deals.
*. Power of Attorney: A person with power of attorney acts as an agent for someone else in legal or financial matters, with clear authority outlined in legal documents.
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General rules of agency
Here are the general rules of agency:
- Consent: Both the agent and principal must agree to the agency relationship.
- Control: The principal must have control over the agent's actions.
- Fiduciary Duty: The agent must act in the best interests of the principal.
- Authority: The agent must have authority to act, which can be actual or apparent.
- Accountability: The agent must account for all actions taken on behalf of the principal.
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Creation of agency
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To create an agency relationship, consider the following steps:
- Consent: Both the principal and agent must agree to the relationship.
- Authority: Define the agent's authority, whether actual or apparent.
- Control: The principal must have control over the agent's actions.
- Fiduciary Duty: The agent should act in the principal's best interest.
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Termination of agency
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Termination of agency can occur in various ways, such as:
- Mutual Agreement: Both parties agree to end the agency.
- Fulfillment of Purpose: Task or goal is completed.
- Expiration: Agency term ends.
- Revocation or Renunciation: Either party chooses to terminate.
- Death or Incapacity: Of the principal or agent.
If you have any specific questions, feel free to ask!