Agency by necessity is a legal concept that refers to a situation where an individual (the agent) assumes responsibility over another person's affairs (the principal) based on the necessity of the situation. This type of agency arises when a person is unable to act on their own behalf due to physical or mental incapacity, or when unforeseen circumstances prevent them from doing so.
In the absence of a formal agency agreement, a person may be deemed an agent by necessity if they step in to act in the best interest of the principal out of an urgent need or emergency. This could occur, for example, when a person falls ill or is involved in an accident, and immediate decisions need to be made regarding medical treatment or financial obligations.
For agency by necessity to apply, three conditions must typically be met. Firstly, there must be a genuine necessity for someone to act on behalf of the principal. Secondly, the agent must act in good faith, solely in the principal's best interest, and without any personal gain or self-interest. Finally, the principal, upon learning of the agent's actions, must subsequently ratify or confirm the agency relationship.
Under agency by necessity, the agent may have the authority to make decisions and enter into contracts on behalf of the principal. However, this authority is limited to the specific circumstances necessitating the agency and does not extend to unrelated matters.
Overall, agency by necessity serves as a legal mechanism to ensure that the best interests of a principal are protected when they are unable to act on their own behalf, allowing a trusted individual to step in and make decisions on their behalf in urgent or unforeseen situations.
