Agent is one who is authorised or delegated to transact business for another (who in this relation is called his principal or constituent) in whose place he comes, and who is bound by his acts in the business to which the agency extends. In Roman law, this was the gratuitous contract of mandate, but the modern factor almost invariably works for hire. Even where gratuitous, the mandatory is of course bound to account for his intrusions, and entitled to do what is necessary for executing his instructions, and to re-inbursement of his advances and relief of his engagements. The appointment of a mercantile agent may either be general, which is the common case of an agent for a foreign merchant, the agent being generally liable for all orders given on account of his principal, because it is improbable that credit will be given to a foreigner; or special, which is confined to a particular line of business. The most common kinds of special agents are brokers, stockbrokers, ship-brokers, insurance-brokers, supercargoes, ship's-husbands, procurators to draw or accept bills, wharfingers, travellers or riders, bank-agents, and law-agents. In all these cases the powers and liabilities of an agent are fairly well fixed by mercantile custom and understanding, or in some cases by a written authority which is exhibited.
Third parties dealing with an agent are not concerned with unusual restrictions placed upon his authority. The agent is bound to carry out with care the instructions given. He is not liable for the solvency of customers, unless he has accepted a deh credere commission. He must obtain the consent of his principal to his dealings on his own account in the business of the agency. His remittances should be through a bank of good reputation, and if he pays into his own account he is liable for the amount. If the principal is not named when the contract is made, the agent is personally bound as well as the principal; but if the principal is named, or otherwise known, prima facie the agent undertakes no liability to the customer. In the former case, of course, the customer may insist on a settlement of his separate account with the agent. The customer may, and does frequently, elect to deal only with the principal after he is discovered, and in such cases the agent no longer remains liable. Principals are generally liable for the fraud and misrepresentation of an agent committed in the line of the business. Factors have power to sell and pledge goods for advance, but no general power to borrow on the credit of the principal, or to grant any obligation outside the ordinary course of business. In Diplomacy it is essential to distinguish between those agents, such as ambassadors, &c. who have the right of embassy, including inviolability of person and house, and agents sent merely to negotiate a loan, or to mark a boundary.
In the United States an agency may be created by deed, in writing not by deed, or by verbal delegation of authority. It may be implied from the relation and acts of the parties and the nature of the employment, without any express appointment. When the authority extends to all acts connected with a particular business, it is called general; but when confined to a single act, it is called special. The agency may terminate by revocation of the power conferred. A person cannot act as agent in a transaction wherein he has an adverse interest or employment. The death of either principal or agent terminates the agency.—For the duties of consular agent, see CONSUL.