insurance agents

Agency is an area of Commercial law dealing with a contractual or quasi-contractual tripartite set of relationships when an Agent is authorised to act on behalf of another (called the Principal) to create a legal relationship with a Third Party. This branch of law separates and regulates the relationships between:

The common law principle in operation is usually represented in the Latin phrase, qui facit per alium, facit per se, i. e. the one who acts through another, acts in his or her own interests and it is a parallel concept to vicarious liability and strict liability in which one person is held liable in Criminal Law or Tort for the acts or omissions of another.

The concepts

The reciprocal rights and liabilities of Principal and Agent reflect commercial needs and legal realities. Cabell, CIC. In any business of size, it is not possible for one person to travel everywhere to negotiate all the transactions necessary to maintain or grow the business. These problems are increased if the business is a corporation, because it is then a fictitious legal person and, as such, it can only act through human agents. Hence, independent people are contracted by businesses to buy and sell goods and services on behalf of those businesses. When agreements are made, the Principal is liable under the contract(s) made by the Agent. So long as the Agent has done what he or she was instructed to do, the result is the same as if the Principal had done it directly.

If the issue is considered from the view of innocent Third Parties, they are approached by a person who is clearly identified as acting for another. State Farm Insurance Companies.