Agency by Implied Agreement Can Be Inferred From: Understanding the Legal Concept
In the realm of law, agency by implied agreement is an important concept that often arises in business transactions and relationships. Understanding what this term means and how it works is crucial for both legal professionals and business owners alike. In this article, we will explore the basics of agency by implied agreement, its legal implications, and how it can be inferred from different circumstances.
What is Agency by Implied Agreement?
Agency by implied agreement, also known as implied agency, refers to the legal relationship that arises between two parties when one party (the principal) gives the other party (the agent) the authority to act on their behalf without an express written or verbal agreement.
In other words, when a principal does or says something that leads a third party to believe that someone else is acting on their behalf, even when there is no formal agreement in place, agency by implied agreement can be inferred. This means that the agent can legally bind the principal to agreements, contracts, and obligations, as long as they were acting within the scope of their assumed authority.
Legal Implications of Agency by Implied Agreement
One of the most important legal implications of agency by implied agreement is that the principal can be held liable for the actions of the agent, even if they did not explicitly authorize those actions. This means that if an agent makes a mistake or causes harm while acting on behalf of the principal, the principal can be sued for damages.
Another important legal implication is that the agent has certain duties and obligations to the principal, even if there is no formal contract in place. These duties include loyalty, obedience, and care, which means that the agent must act in the best interests of the principal at all times.
How Can Agency by Implied Agreement Be Inferred?
Agency by implied agreement can be inferred from a wide range of circumstances, including:
– Conduct: When the principal behaves in a way that leads a third party to believe that someone else is acting on their behalf, agency by implied agreement can be inferred. For example, if a business owner allows an employee to negotiate a contract with a vendor, the vendor may assume that the employee has the authority to act on behalf of the business owner.
– Custom and Trade Usage: In some industries, certain practices are so common that they can imply an agency relationship. For example, if a real estate broker hires an appraiser to assess a property, it may be inferred that the appraiser is acting on behalf of the broker.
– Necessity: When an emergency or urgent situation arises, an agent may be authorized to act on behalf of the principal without a formal agreement. For example, if a business owner is out of town and their store needs to be opened, they may implicitly authorize an employee to open the store.
Conclusion
In summary, agency by implied agreement is a legal concept that arises when one party gives another party the authority to act on their behalf without a formal written or verbal agreement. This concept has important legal implications for both principals and agents, and can be inferred from a variety of circumstances. By understanding the basics of agency by implied agreement, business owners and legal professionals can avoid potential legal pitfalls and ensure that their transactions and relationships are legally sound.