An authorized agency agreement is a commercial law accession between an agent and a principal on the basis of a relationship which can be contractual, non contractual or a quasi contractual relationship. An agent is a professional authorized to work and act on behalf of another person termed as a principal. In simple term, an agent works on a principal’s behalf and a principal is legally liable for agent’s actions and is bound to bear any consequences, if occurred.

The agreement is drafted under a legal advisor’s supervision and incorporates thorough terms, conditions and authorizations provided to the agent by the principal. The care is taken while drafting the agreement since principal is bound to bear the outcomes of actions of his agent. The purpose of an authorized agency relations is not only convenience but sometimes also a necessity.

The most common example of authorized agency agreement is real estate where people normally authorize real estate employees to sell or purchase a property on their behalf.

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