When it comes to business transactions, one concept that you may encounter is the “contract of agency,” which involves two main parties: the principal and the agent. The principal is the person or entity that hires an agent to act on their behalf, while the agent is the one authorized to perform certain tasks or make decisions in the principal’s name.
However, there are different types of agents in a contract of agency, each with distinct roles and responsibilities. Here are some of them:
1. Universal Agent
A universal agent is someone who can act on behalf of the principal in any legal matter or transaction, including the power to sell or transfer ownership of the principal’s assets. This type of agency is rare and typically only granted in specialized situations.
2. General Agent
A general agent has broad authority to act on behalf of the principal in a specific area or business, such as a real estate agent representing a homeowner in property sales or a sales agent representing a company in product distribution. General agents have more limited powers than universal agents, but still have a significant amount of autonomy.
3. Special Agent
A special agent, also known as a specific agent, has a narrow scope of authority to act on behalf of the principal in a particular transaction or task. For example, a person hired to sell a car on behalf of the owner would be considered a special agent. Special agents have limited powers and are only authorized to act within specific guidelines set by the principal.
A subagent is a person or entity authorized by the agent to perform specific tasks on behalf of the principal. In other words, subagents act as an extension of the agent’s authority and are typically used when the agent cannot perform certain tasks themselves. For example, a real estate agent may hire a subagent to handle the paperwork involved in a property transaction.
A co-agent is an agent who shares responsibility for a transaction or task with another agent, usually because the principal requires more than one agent to complete the job. Co-agents may share commissions or fees, and each may have different areas of expertise or responsibility.
Understanding the different types of agents in a contract of agency is important to ensure that your business transactions are carried out legally and efficiently. If you are a principal hiring an agent or an agent accepting a contract, it is essential to clarify the type of agency being established and the extent of the agent’s authority to avoid misunderstandings or legal issues down the line.