Agency is an arrangement under which a principal appoints an agent to act at its direction for specified purposes. In business, agents are commonly appointed for the purposes of introducing and concluding agreements with new customers, marketing or customer support. Agency law thus deals with the relationships between:
principal and agent
agent and third party, and
principal and third party
In many cases, an agent in business will be a commercial agent within the Commercial Agents (Council Directive) Regulations 1993, SI 1993/3053 (see below). Where those regulations apply, they impose various terms on the relationship between principal and commercial agent, many of which the parties may not exclude by contract.
An agency is normally express, ie the parties agree that their relationship is that of principal and agent. It may also be implied by conduct or representative agreements.
Agency as a term is sometimes applied to arrangements, such as distributorships, that are not, in law, agencies. However, these non-fiduciary, contractual arrangements are different in law to an agency and the relationship gives rise to different legal rights and obligations.
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