An authorized agent is someone who has the power to act on behalf of another person. Generally, authorized agents will act on behalf of a person claiming a copyright, an author, or someone that owns an exclusive right to something.

What is an Authorized Agent?

Authorized agents can either be business entities or individuals. Typically, to act on your behalf, an authorized agent must be physically located within the United States. To give an agent the power to operate in your stead, you would need to give them a written authorization or grant them power of attorney. In many cases, an authorized agent can act as an intermediary between two parties. For example, if you are buying something, the authorized agent can communicate with the seller in your place and may even be able to complete the sale, depending on the scope of their powers.

The person granting power to the authorized agent is the principal. Creating an agency relationship requires that the principal agree to allow the agent to act on their behalf and that the principal will be able to direct the agent's actions. In many cases, an agency relationship is not formalized in writing, and is instead created by the conduct or words of the parties. The intention of the principal and the agent can also create an agency relationship.

The best way to think of the relationship between an authorized agent and a principal is as a financial arrangement. Generally, there is an authorized agent involved in a sale or some other type of financial transaction.

Establishing that a relationship exists between a principal and an agent requires providing two facts. First, there must be proof that the principal agreed to the relationship. The assent of the principal can be either implied or expressly given. Second, you must demonstrate that the agent is under the control of the principal.

Scope of an Authorized Agent's Power

The power of an authorized agent is created by the consent of the principal. Therefore, the scope of an agent's power is limited to this consent. If a principal has not authorized an action, then the agent cannot legally complete said action. The intention of the principal may also determine the scope of an agent's authority. For example, if the principal intended for the agent to complete an action, then the agent has the authority to follow through with the action, even if the principal provided no express consent.

The terms of a given contract can also define an agent's authority. In a contract, what an authorized agent can and cannot do may be specifically outlined. An agent's authority can be apparent or actual.

Delegation of Authority

When authority is delegated to an agent, this delegation implies that the agent has the power to complete any acts that would be necessary of the principal. Even after this delegation, however, there are some limitations to the agent's power. For example, the agent will not have power beyond what is necessary to complete a given act on the principal's behalf.

In most cases, an authorized agent has all principal powers. Legally, this means that the agent has the ability to do everything that the principal would do, including agreeing to contracts. When an agent is delegated authority, this power only applies to the agent. Authorized agents are not allowed to delegate their authority to another person.

While authorized agents cannot transfer their power, they may hire sub-agents or clerks. If the clerks or sub-agents act in the name of the authorized agent, their actions will be legally binding for the principal.

Apparent authority is given when the principal causes a third-party to act with the authority of the authorized agent. There are several ways to grant this type of authority.

  • Intentionally granted by the principal.
  • Implied by the actions of the principal.
  • Granted through the inaction or lack of care of the principal.

Apparent Authority and Liability

Apparent authority is created when a third-party has the reasonable belief that they have the authority to act on behalf of the principal. When a principal's actions imply apparent authority, the principal can be held liable for the actions of the third-party.

Before a principal agent can be held liable due to apparent authority, several facts must be established:

  • Consent to exercise this authority was manifested by the principal.
  • The third-party acted in good faith and believed that authority had been granted to the agent.
  • The third-party has suffered an injury or loss due to their belief in apparent authority.

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