Agency Relationship Between Broker and Principal Duties of the Principal and Agent Dual Agency Agency Relationship Between Broker and Principal Duties of the Principal and Agent Dual Agency Agency Relationship Between Broker and PrincipalIn a legal context, the term agency ordinarily describes a relationship in which two parties—the principal and the agent—agree that one will act as a representative of the other. The principal is the person who wishes to accomplish something, and the agent is the one employed to act in the principal's behalf to achieve it.
Since 1872, California Civil Code § 2295 has provided that: "An agent is one who represents another, called the principal, in dealings with third persons."
A principal is a person who employs another to act as his or her agent in dealings with third parties. The person who gives authority to an agent or attorney to do some act for him/her.
The word principal will include, when applicable to the circumstances, the seller, buyer, lessor, lessee, lender or borrower.
An agency is a relationship between a principal and an agent, whereby the agent represents or acts on behalf of the principal in dealings with third parties. From this simple relationship a vast body of rules has emerged, governing the rights and duties of the principal and the agent.
The principal-agent relationship, as we use it, means a relationship in which the parties have agreed that the agent is to represent the principal in negotiating and transacting business, only so far as the agreement between the parties authorizes.
Special Agency: The agency relationship you will most often be dealing with is referred to as a special agency as compared to a general agency. The agent (broker) is a special agent and is authorized to perform only those acts specifically authorized by the principal.
General Agency: That which exists when there is authorization by a principal to do all acts connected with a particular trade, business or employment. It implies authority on the part of the agent to act without restriction or qualification in all matters relating to the business of his or her principal.
Dual Agency: An agency relationship in which the agent acts concurrently for both of the principals in a transaction.
Single Agency: A single agency is one in which an agent represents only one principal.
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