Sub-agency
Sub-agency

The following Commercial practice note provides comprehensive and up to date legal information covering:

  • Sub-agency

This Practice Note discusses the personal nature of an agency relationship, and the circumstances in which the agent may delegate its authority to a third party or sub-agent.

The general rule, arising from the personal nature of an agency, is that an agent may not entrust to another the exercise of a power or duty. However, delegation is allowed with the principal's consent, or where empowered by statute. It may be implied, among other cases:

  1. where no personal skill or confidence is required of the agent, and its duties can be sufficiently discharged by any person

  2. under custom or trade usage

  3. where the principal is, or can be presumed to be, aware that the agent intends to delegate, and does not object, or

  4. where the nature of the agency requires partial or total delegation (eg involves acts the agent cannot physically perform itself)

There is generally no privity of contract between a principal and a sub-agent. The sub-agent is liable only to the agent, who:

  1. is liable for the sub-agent's acts and defaults

  2. must account to the principal for money received by the sub-agent, and

  3. is liable for the sub-agent's remuneration

Privity may, however, exist where the principal agreed to the sub-agent's appointment and it was intended that the principal should have privity of contract with the s

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