AGENCY IN FACT Meaning and
Definition
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Agency in fact refers to a legal relationship in which one party (the principal) grants another party (the agent) the authority to act on their behalf in various matters. Unlike agency by estoppel or agency by necessity, agency in fact is established through the actual consent and agreement between both parties, either in writing or through oral communication.
In this type of agency, the agent is authorized to perform certain actions and make decisions that bind the principal. The agent may engage in transactions, sign contracts, negotiate deals, or conduct other business activities on behalf of the principal. The agent is expected to act in the best interests of the principal within the scope of their authority and follow any specific instructions given by the principal.
The authority granted to the agent in an agency in fact relationship can be broad or limited, depending on the specific terms agreed upon between the parties. It is crucial for both the principal and agent to clearly define the scope and limitations of the agent's authority to avoid any misunderstandings or potential liability issues.
In agency in fact, the agent does not necessarily need to have any special qualifications or official appointment. The authority can be implied from the conduct or behavior of the parties involved, demonstrating a mutually understood relationship of agency.
Overall, agency in fact refers to a legally recognized relationship where one party acts on behalf of another with the authority to make decisions and carry out actions on their behalf, all based on the consent and agreement between the parties involved.
