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TeachMeFinance.com agent -- a person who acts for or in place of another with authority delegated by the other person. another definition... Agent -- A person or legal entity authorized to act on behalf of another. another definition... Agent --Person who is authorized by a principal to act on the latter�fs behalf in dealings with a third party. Employees of a bank act on behalf of bank customers, who are the principals empowering the bank to take actions in their best interest. Agents are at all times required to abide by the directives of the principal; allow the principal to supervise and exercise control over their doings; and hold no claim upon the assets of the principal. See also Account Executive, Broker, Transfer Agent. historic definition... Agent -- One authorized to transact business for another. A principal is responsible for the act of an agent, but the agent who exceeds his authority renders himself personally liable. An agent cannot bind his principal by any act performed contrary to instructions unless it be an act which agents of his class usually have authority to perform and the person with whom he is dealing is ignorant of the instructions which limit the agent's powers in that particular case. A person dealing with an agent is entitled to assume if not advised to the contrary that he has the authority usually possessed by agents in the same line of business. If a person dealing with an agent knows that the agent is acting contrary to his instructions the principal is not bound by the agent's acts. Otherwise he is bound. Any commission that an agent undertakes to execute he by implication represents himself as able to do in a reasonably correct and successful manner. If by reason of his own ignorance of his duties as agent his work is of no value hecannot charge for it. An agent is bound promptly to obey all proper instructions of his principal and faithfully and particularly to account for all the money and other property of his principal which may have come into his hands. Such an accounting he is bound to make at some reasonable time without special instructions and he is bound to make it at any time when he is called upon to do so. An agent who persistently disregards his principal's demand that he shall make an accounting is derelict in a duty which the law enforces with strictness and he has therebv given sufficient cause for his dismissal. When a reasonable time has elapsed after the demand for an accounting and the agent has no valid excuse for a failure to make it, as sickness or unavoidable accident, he may be discharged. An agent having the custody of his principal's property is bound to insure it if instructed to do so. Moreover, he is bound to insure it without special instruction if it has been his own custom or if it is a common custom of agents having the custody of property of that kind to insure it without instruction to do so. The owner of property is justified in supposing that the usual custom will be followed by his agent in caring for the property without any special instruction and in the event of the agent's failure to follow the custom he is liable for a loss suffered by his principal through such neglect. In any other case he is not bound to insure unless he receives specific direction to do so. If an agent (or executor or trustee or attorney) deposits in a bank or other depository in his own name money which he holds in trust it shall be the agent's loss in case the bank (or depository) fails. The reason of the rule is that an agent cannot be allowed to determine after a loss whether the money on deposit was his own or that held by him in trust. The presumption is that a deposit belongs to the depositor and the agent (who is a trustee) is not allowed by the courts to dispute that presumption after a loss. If the agent wishes to charge his principal with the loss if any should occur he must state to the principal when the deposit is made that it is the money of the principal and not his own; that he is not only an agent but that in this particular transaction he is acting in that capacity. About the author Mark McCracken Author: Mark McCracken is a corporate trainer and author living in Higashi Osaka, Japan. He is the author of thousands of online articles as well as the Business English textbook, "25 Business Skills in English". Copyright © 2005 by Mark McCracken, All Rights Reserved. TeachMeFinance.com is an informational website, and should not be used as a substitute for professional financial or legal advice. TeachMeFinance.com and its owner recommend consultation with a professional financial advisor prior to any investment or financial decision. Please read our disclaimer.