Also known as: principal-agent relationship · principal agent relationship · principal and agent · agency · agency relationship
Written by attorneys · grounded in primary & secondary sources — see below
A legal relationship in which one party, the principal, authorizes another, the agent, to act on the principal's behalf and subject to the principal's control, creating fiduciary duties and the power to alter the principal's legal relations with third persons.
Phoenix Technologies receives a subpoena for a deposition in a contract dispute. The company designates its vice president of operations as the sole witness after conferring with opposing counsel about the topics. The vice president testifies about information known or reasonably available to the company on those matters.
Pedro Pacheco leaves his role as a state procurement officer and joins a private firm. The firm seeks to represent a client in a matter on which Pacheco participated personally and substantially while in government. The state agency refuses to give informed written consent, so the firm declines the representation.
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Pacific Bank appoints Parker Phillips as its loan officer for commercial accounts. Phillips learns confidential borrower information while negotiating a loan on the bank's behalf. Phillips may not use that information for personal gain because the agency relationship imposes fiduciary duties on matters within its scope.
A city agency adopts a foster-care policy allowing individualized exemptions from its same-sex certification rule. A religious agency seeks an exemption on faith grounds. Because the policy grants officials discretion to exempt some applicants, the rule is not generally applicable and triggers strict scrutiny.
Precision Tools agrees to buy steel from Prism Analytics at a price set by an industry index published by a trade association. The association stops publishing the index. Because the agreed standard is not recorded, the price term fails and the buyer may treat the contract as cancelled or fix a reasonable price.
Patrick Phan stops providing financial support to his spouse Pearl Porter after separation. Pearl petitions the court for alimony. The court may order support based on her need and his ability to pay, and Pearl may also seek reimbursement for necessaries she purchased even without an express agency agreement.
An agency relation exists only if the principal manifests consent that the agent may act on the principal's account and the agent consents to do so. The principal must also retain the right to control the agent's conduct with respect to matters entrusted to the agent.
Yes. An agent is a fiduciary with respect to matters within the scope of the agency. This duty requires the agent to act loyally and avoid self-dealing or using confidential information for personal benefit.
Yes. The relation of principal and agent can be created although neither party receives consideration.
Inherent agency power arises solely from the agency relation itself and exists to protect persons harmed by or dealing with the agent, independent of any manifestation of authority or estoppel.