Agency by appointment refers to a legal arrangement where one individual, known as the principal, grants authority to another person, known as the agent, to act on their behalf. This agreement is typically established through a formal appointment or authorization by the principal.
Under an agency by appointment, the agent is permitted to undertake various tasks and make decisions on behalf of the principal within the scope of the agreed-upon authority. This may involve negotiating contracts, managing finances, making purchases, or engaging in other business-related activities. The agent takes on a fiduciary duty to act in the best interests of the principal and follow their instructions.
The agency by appointment relationship can be established in several ways, such as through a written agreement, a verbal agreement, or even through the actions and conduct of the parties involved. However, to ensure legal clarity and avoid misunderstandings, it is advisable to have a written agreement that explicitly outlines the scope, duration, and terms of the agency.
It is important to note that the agent is not personally liable for the obligations or contracts entered into on behalf of the principal, as long as they act within the authorized parameters. However, the principal remains responsible for any consequences resulting from the agent's actions.
This type of agency can exist in various settings, including business, legal, and personal matters, where individuals may delegate certain responsibilities to others they trust to act on their behalf.
