An Agency Agreement Arises When

An agency agreement is a legally binding document that sets out the terms and conditions of a business relationship between two parties, namely, the principal and the agent. The principal in this case is the business or person who hires the agent to act on their behalf, while the agent is the one who represents the principal in the business dealings.

Several situations can give rise to an agency agreement. Here are some of them:

1. Appointment of an agent: One common way an agency agreement arises is when a principal appoints an agent to carry out specific tasks on their behalf. For example, a manufacturer may appoint a distributor to sell their products in a particular region, or an artist may appoint a talent agency to negotiate contracts on their behalf.

2. Implied agreement: Sometimes, an agency agreement can arise by implication. This means that the conduct of the parties may suggest that an agency relationship exists. For instance, if a person regularly acts on behalf of another person in business dealings, it may be inferred that an agency relationship exists.

3. Express agreement: An agency agreement can also arise when the parties expressly agree to it. This can be done through a written or verbal agreement that sets out the terms of the relationship between the principal and the agent. A written agreement is always preferred as it provides a clear record of the terms of the agreement.

4. Power of attorney: A power of attorney is a legal document that allows a person (the agent) to act on behalf of another person (the principal) in legal and financial matters. This document can give rise to an agency agreement if the agent is authorized to carry out specific tasks on behalf of the principal.

Regardless of how an agency agreement arises, it is essential to ensure that the terms of the agreement are clearly spelled out to avoid any misunderstandings between the parties. The agreement should clearly state the scope of the agent`s authority, the duration of the agreement, the compensation for the agent, and any other relevant terms.

In conclusion, an agency agreement arises when a person or business hires another person or business to act on their behalf. The agreement can arise in several different ways, including express agreement, appointment of an agent, power of attorney, and implied agreement. As a professional, it is essential to ensure that any content related to agency agreements is clear, concise, and informative for readers.