Also known as: principal · agent · principal-agent · agency · agency relationship · principal and agent
Written by attorneys · grounded in primary & secondary sources — see below
A legal relationship in which one party authorizes another to act on its behalf. The principal is bound by the agent's acts when they fall within the scope of the granted authority.
Patrick Phan owns an apartment building and hires Paul Peterson as property manager with authority to collect and deposit tenant rent. Paul keeps one tenant's payment each month to repair his own house. The principal-agent relationship determines that Paul's initial possession is lawful but his later conversion exposes Patrick to liability for the missing funds.
The President directs the head of a federal department to prepare a written opinion on treaty negotiations. The department head acts as agent within the scope of executive duties. The principal-agent structure confirms that the opinion binds the executive branch in the treaty process.
Select any source to read its text and confirm it supports the definition.
Pierce Patterson sues Platinum Partners after an on-site injury. A company supervisor tells an investigator that the safety protocol was ignored. The statement qualifies as an admission because the supervisor spoke as agent on a matter within the employment relationship at the time it existed.
Priya Prasad previously represented a client in a permitting dispute while in private practice. She later joins a government agency and is asked to participate in the same matter. The principal-agent rule bars her involvement unless the agency gives informed written consent.
Pavel Petrov authorizes Pioneer Energy to sell equipment across multiple states on a continuing basis. The representative negotiates and closes dozens of contracts over two years. The arrangement creates a general agency because the authority covers a series of transactions with continuity of service.
Paragon Construction maintains its incorporation and headquarters in Delaware but performs substantial work in another state. A plaintiff sues there for an unrelated claim. The principal-agent structure shows that general jurisdiction does not arise merely from doing business. The corporation is at home only in its state of incorporation or principal place of business.
When an agent acts within the scope of authority, the principal may face civil liability even if the agent's conduct later constitutes a crime such as embezzlement. The key is whether the agent held lawful possession at the outset and then converted the property. Criminal liability for the agent does not automatically transfer to the principal unless the principal directed or ratified the act.
Supporting sources
A statement qualifies as an admission if made by the party's agent on a matter within the scope of the relationship and while the relationship existed. The rule treats the agent's words as the principal's own for evidentiary purposes. The existence and scope of the agency must be shown by independent evidence.
Supporting sources
A general agent holds authority to conduct a series of transactions involving continuity of service. A special agent is limited to a single transaction or a series lacking that continuity. The distinction determines the breadth of authority and the principal's exposure to third-party claims.
Supporting sources
No. A corporation is subject to general jurisdiction only where it is at home, typically its place of incorporation or principal place of business. Extensive operations elsewhere do not suffice absent exceptional circumstances. The rule protects corporations from being haled into distant forums for unrelated claims.
Supporting sources
…act, passed 27 July 1789, established an executive department denominated the Department of Foreign Affairs and appointed a principal officer to perform duties enjoined or intrusted to him by the President relative to correspondences, commissions, instructions, negotiations with public ministers, memorials and other…