Scope of an Agent's Authority

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What Is an Agent?

An agent is someone who agrees to represent another person, called a principal. An agency relationship is usually formed by an agreement between the two parties. An agent can only act on behalf of a principal for certain issues (depending on the agreement).

What Is the Scope of an Agent's Authority?

Ultimately, this depends on the agreement made between the principal and the agent. In general, there are two ways to determine the scope of an agent's authority:

Are There Other Ways to Determine an Agent's Authority?

There are situations where an agent's authority is created even if the person is not an agent. Here are examples of these different situations:

Why Is Agent Authority Important?

Agent authority often decides whether a principal or an agent is liable for a lawsuit. If the agent acts under the principal’s authority, then the agent was most likely under the principal’s control, thereby making the principal liable. In most instances, the principal has more money than the agent. As a result, injured parties want to go after a principal because that means more money, even though suing the agent would be easier.

What Happens If the Agent Was Operating Outside the Scope of Authority?

If the agent was outside his or her scope of authority, then the principal is not liable for any injuries. The only exception is if the principal ratified an agreement. If the agent was acting outside the scope of authority, the agent may be liable for any injuries or breach of contract.

How Can an Attorney Help Me?

An agency relationship is similar to an employer-employee relationship. An experienced employment lawyer can assist you in issues dealing with issues involving agency law. For example, an employment lawyer can help you draft an agency agreement or inform you if any parties have violated their duties.

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Last Modified: 01-24-2014 03:23 PM PST

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