Nowadays, most businesses enter into agency agreements with another business entity or individual. There are a couple of reasons why they opt to do this such as for assistance, convenience, to accomplish a profit-driven strategy, and the like.
Like any other contractual agreement, agency agreements manifest into various types and forms. Common kinds of agency contracts are sales agency contract, construction contract, and the like. As you scroll through our list of templates, you can learn more how these agency contracts are written and crafted. To add, there are also key contractual information and tips that you may use in your dealings.
In an agency contract, the contracting parties are known as the principal and the agent. In this case, the agent is given authority by the principal to represent him or her in the performance of former’s responsibilities. To understand their dynamics better, here are common forms of agency agreements.
In the field of marketing, marketing contract templates are used to draft and secure an agreement for the agent to promote the brand in the ways that empowers the vision of the principal company. Likewise, booking agents also ensure they act in due diligence in the exercise of their duties.
In order to attain convenience and cover a wide market, business entities make agency agreements. However, there are also accompanying risks.
One of the glaring risk is liability. Because the agent acts on behalf of the principal in a fiduciary capacity, whatever liability the agent incurs in the performance of his or her duties will also rebound on the principal. The principal can be held liable for the misconduct and negligence of the agent.
In line with this, the principal must be keen and specific in drafting the provisions of the contract. The contract must include both general and specific clauses. It should emphasize the scope of authority bestowed to the agent by the principal. A good example would be in the case of a maintenance agency contract.
In this case, the Maintenance Contract Template must specifically lay out the limits of the scope of the agent’s power. As a general rule, the principal is not responsible for any misconduct done by the agent that is beyond the authority provided to the latter unless otherwise provided by the contract.
A point to note in dealing with agency contracts are the governing laws and policies that your country observes when it comes to agency-principal relationship.