Agency by Express Agreement and Agency by Operation of Law

Agency by express agreement and agency by operation of law are two common types of agency relationships in business and law. Understanding the differences between the two can help individuals and businesses navigate their legal obligations and protect their interests.

Agency by express agreement refers to a situation in which two parties enter into a contractual relationship that explicitly establishes one party as an agent of the other. This type of agency is created when the principal and agent explicitly agree to the terms of the agency relationship, including the scope of the agent`s authority, the duties and responsibilities of each party, and the compensation or remuneration for the agent`s services. This type of agency is most commonly found in employment relationships, where an individual is hired to act as an agent of an employer.

On the other hand, agency by operation of law is a type of agency relationship that is created by law, rather than by agreement between the parties. This type of agency relationship may arise in several situations, such as when an agent exceeds the authority granted to them by a principal or when a principal fails to explicitly appoint an agent but the circumstances suggest that an agency relationship exists. For example, if a company allows an individual to act as its agent and represent the company in business dealings without formally appointing them as an agent, an agency relationship may be created by operation of law.

One key difference between these two types of agency relationships is the degree of control that the principal has over the agent. In an agency by express agreement, the parties have agreed to the terms of the relationship and the scope of the agent`s authority, giving the principal greater control over how the agent represents them. In contrast, agency by operation of law may arise unexpectedly, giving the principal less control over the actions of the agent.

Another important difference between these two types of agency relationships is the degree of liability that each party may face. In an agency by express agreement, both parties are typically bound by the terms of the agreement and may be held liable for any breaches or failures to fulfill their obligations. In contrast, agency by operation of law may create a situation where the principal is held liable for the actions of the agent, even if they did not explicitly appoint the agent as their representative.

Overall, agency by express agreement and agency by operation of law are two important types of agency relationships in business and law. Understanding the differences between these two types of relationships can help parties navigate their legal obligations and protect their interests. As a professional, it`s important to create content that is informative and easy to understand, using keywords and language that resonates with your target audience.