What is the law of agency?

In Virginia, the law of agency is a legal relationship in which one person (called the “agent”) is authorized by another (the “principal”) to act on the principal’s behalf. The agent has the power to create legal relationships between the principal and third parties, such as contracts. The agent can bind the principal in the eyes of the law and the principal is responsible for the acts of the agent. The agent must act in accordance with the instructions of the principal and within the scope of authority granted to the agent. The agent must also act with reasonable care and skill. An agent who fails to act in accordance with these requirements can be held liable for the resulting damages. Agency can also be created by implication. This may arise where a principal has placed an agent in a position to act on the principal’s behalf. In such a case, a court may determine that an agency relationship has been created, even though there is no express agreement between the parties. Finally, the law of agency also covers termination of the relationship. Agency relationships typically end when either party terminates the contract, or when an agent’s authority ends for any other reason. When the agency relationship is terminated, any further acts by the agent on behalf of the principal are invalid.

Related FAQs

What are the basic principles of commercial law?
What is the procedure for dispute resolution through arbitration?
What are the rules governing competition in the marketplace?
What is the procedure for voting on resolutions at a shareholders' meeting?
What is the legal process for commercial disputes?
How can I protect my business from unfair competition?
What is the law on anti-competitive practices?
What is the law of tort?
What is the process for winding up a company voluntarily?
What is the law on corporate taxation?

What is the law of agency?

Related FAQs

Related Blog Posts