Ch. 12 Law of Agency

the law that applies whenever one acts as an agent on behalf of another.

Agency

a relationship in which one person (the agent) is granted the authority to represent and act for another person (the principal) in dealings with others

Agent

at common law, an agent is any person who contracts to act for or on behalf of another, who in turn, is known as the principal

Principal

at common law, the person for whom an agent has contracted to act for, and for whose benefit the agent is required to perform and make decisions

Warranty of authority

an agent’s promise or guarantee to third parties that their actions fall within the scope of authority given by the principal. An agent acting outside of the scope of authority breaches the warranty of authority

THE AGENCY RELATIONSHIP

-Generally speaking, an agent has the power to bind (or commit) the principal to do certain things.

-The agent is not a party to the contract (and will not have any rights or obligations under the contract)

-While the agent may represent and perform certain actions on behalf of the principal in dealings with others, in a typical real estate agency relationship in British Columbia, the agent does not have the authority to sign contracts on behalf of the principal.

-If the principal would like to provide this authority to the agent, they must do so in writing.