What you need to know about Agency Agreements
Sometimes, you just can’t do everything yourself. Whether it’s finding a buyer for your home, seeking a publisher for your memoirs or securing the raw materials your business needs to keep running, there are many reasons you may need someone else to help you out. Often, you need a person with special knowledge, abilities or personal connections. When you want these people to be able to enter negotiations and contractual agreements on your behalf, what you need is an agent.
WHAT IS AN AGENT?
An agent is a person who has the lawful authority to enter you into a legal relationship with another party. No mere employee (though employees may be agents), an agent is specifically granted the legal authority by the person who hires them (known as a Principal) to enter into contracts, agreements or other legally binding relationships with third parties.
WHAT DOES AN AGENT DO?
Put simply, an Agent can do anything you authorise them to do. Whether you hire an Agent to sell your products for a commission, plan a wedding or manage your rental property, your Agent can do anything you are allowed to do. If you have a right to act, you can hire an Agent to act on your behalf.
HOW DO I GET AN AGENT?
You can enter into an Agent-Principal relationship simply by agreeing to it in a conversation (an oral contract) or by entering into a written agency contract. Oral contracts are sometimes necessary given time constraints or other factors, but most often you will be entering into written agreements with your Agents. Not only this, but some specific kinds of Agent-Principal relationships require a written agreement by law.
WHAT DO I NEED TO KNOW BEFORE I USE AN AGENT?
Before entering into any Principal-Agent relationship, you should always be sure the Agent you intend to use is qualified and trustworthy. And though you can hire an Agent simply by an oral contract, you should always get the details of the relationship in writing. A formal Agency Agreement Contract should be drafted and signed by both parties. The agreement should state several things, including; who the parties are, what powers the Principal is granting the Agent, to what purpose and what rights or obligations each party has. Of course, there is a lot more these agreements need to state, but it would be prudent to make sure they state at least these things.
CAN I USE MULTIPLE AGENTS?
Of course. You can have a sole agent contract with an individual, with a group that collectively acts as an individual or with numerous people. Further, you can grant someone an Exclusive Agency Agreement, meaning they are your sole agent for the stated purposed. Or, you can grant a Non-Exclusive Agency Agreement, meaning the powers granted to the Agent can be granted to other Agents as well.
The Principal-Agent relationship is a useful, sometimes necessary, legal relationship that can be used to anyone’s benefit. Finding the right Agent is key, and making sure both parties understand the nature of the powers granted and the obligations of each party is essential. Whenever you consider entering into an agency agreement, make sure you get it in writing first. You can always change it if you need to, but a written agreement is always the best place to start.