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Agency

AGENCY

A consensual relationship created by contract or by law where one party, the principal, grants authority for another party, the agent, to act on behalf of and under the control of the principal to deal with a third party. An agency relationship is fiduciary in nature, and the actions and words of an agent exchanged with a third party bind the principal.

An agreement creating an agency relationship may be express or implied, and both the agent and principal may be either an individual or an entity, such as a corporation or partnership.

Under the law of agency, if a person is injured in a traffic accident with a delivery truck, the truck driver's employer may be liable to the injured person even if the employer was not directly responsible for the accident. That is because the employer and the driver are in a relationship known as principal-agent, in which the driver, as the agent, is authorized to act on behalf of the employer, who is the principal.

The law of agency allows one person to employ another to do her or his work, sell her or his goods, and acquire property on her or his behalf as if the employer were present and acting in person. The principal may authorize the agent to perform a variety of tasks or may restrict the agent to specific functions, but regardless of the amount, or scope, of authority given to the agent, the agent represents the principal and is subject to the principal's control. More important, the principal is liable for the consequences of acts that the agent has been directed to perform.

A voluntary, good faith relationship of trust, known as a fiduciary relationship, exists between a principal and an agent for the benefit of the principal. This relationship requires the agent to exercise a duty of loyalty to the principal and to use reasonable care to serve and protect the interests of the principal. An agent who acts in his or her own interest violates the fiduciary duty and will be financially liable to the principal for any losses the principal incurs because of that breach of the fiduciary duty. For example, an agent who accepts a bribe to purchase only the goods from a particular seller breaches his fiduciary duty by taking the money, since it is the agent's duty to work only for the best interests of the principal.

An agency relationship is created by the consent of both the agent and the principal; no one can unwittingly become an agent for another. Although a principal-agent relationship can be created by a contract between the parties, a contract is not necessary if it is clear that the parties intend to act as principal and agent. The intent of the parties can be expressed by their words or implied by their conduct.

Perhaps the most important element of a principal-agent relationship is the concept of control: the agent agrees to act under the control or direction of the principal. The extent of the principal's control over the agent distinguishes an agent from an independent contractor, over whom control and supervision by the principal may be relatively remote. An independent contractor is subject to the control of an employer only to the extent that she or he must produce the final work product that she or he has agreed to provide. Independent contractors have the freedom to use whatever means they choose to achieve that final product. When the employer provides more specific directions, or exerts more control, as to the means and methods of doing the job—by providing specific instructions as to how goods are to be sold or marketed, for example—then an agency relationship may exist.

The agent's authority may be actual or apparent. If the principal intentionally confers express and implied powers to the agent to act for him or her, the agent possesses actual authority. When the agent exercises actual authority, it is as if the principal is acting, and the principal is bound by the agent's acts and is liable for them. For example, if an owner of an apartment building names a person as agent to lease apartments and collect rents, those functions are express powers, since they are specifically stated. To perform these functions, the agent must also be able to issue receipts for rent collected and to show apartments to prospective tenants. These powers, since they are a necessary part of the express duties of the agent, are implied powers. When the agent performs any or all of these duties, whether express or implied, it is as if the owner has done so.

A more complicated situation arises when the agent possesses apparent authority. In this case, the principal, either knowingly or even mistakenly, permits the agent or others to assume that the agent possesses authority to carry out certain actions when such authority does not, in fact, exist. If other persons believe in good faith that such authority exists, the principal remains liable for the agent's actions and cannot rely on the defense that no actual authority was granted. For instance, suppose the owner of a building offers it for sale and tells prospective buyers to talk to the rental agent. If a buyer enters into a purchase agreement with the agent, the owner may be liable for breaching that contract if she later agrees to sell the building to someone else. The first purchaser relied on the apparent authority of the agent and will not be penalized even if the owner maintains that no authority was ever given to the agent to enter into the contract. The owner remains responsible for acts done by an agent who was exercising apparent authority.

The scope of an agent's authority, whether apparent or actual, is considered in determining an agent's liability for her or his actions. An agent is not personally liable to a third party for a contract the agent has entered into as a representative of the principal so long as the agent acted within the scope of her or his authority and signed the contract as agent for the principal. If the agent exceeded her or his authority by entering into the contract, however, the agent is financially responsible to the principal for violating her or his fiduciary duty. In addition, the agent may also be sued by the other party to the contract for fraud. The principal is generally not bound if the agent was not actually or apparently authorized to enter into the contract.

With respect to liability in tort (i.e., liability for a civil wrong, such as driving a car in a negligent manner and causing an accident), the principal is responsible for an act committed by an agent while acting within his or her authority during the course of the agent's employment. This legal rule is based on respondeat superior, which is Latin for "let the master answer." The doctrine of respondeat superior, first developed in England in the late 1600s and adopted in the United States during the 1840s, was founded on the theory that a master must respond to third persons for losses negligently caused by the master's servants. In more modern terms, the employer is said to be vicariously liable for injuries caused by the actions of an employee or agent; in other words, liability for an employee's actions is imputed to the employer. The agent can also be liable to the injured party, but because the principal may be better able financially to pay any judgment rendered against him or her (according to the "deep-pocket" theory), the principal is almost always sued in addition to the agent.

A principal may also be liable for an agent's criminal acts if the principal either authorized or consented to those acts; if the principal directed the commission of a crime, she or he can be prosecuted as an accessory to the crime. Some state and federal laws provide that a corporation may be held criminally liable for the acts of its agents or officers committed in the transaction of corporate business, since by law a corporation can only act through its officers.

An agent's authority can be terminated only in accordance with the agency contract that first created the principal-agent relationship. A principal can revoke an agent's authority at any time but may be liable for damages if the termination violates the contract. Other events—such as the death, insanity, or bankruptcy of the principal—end the principal-agent relationship by operation of law. (Operation of law refers to rights granted or taken away without the party's action or cooperation, but instead by the application of law to a specific set of facts.) The rule that death or insanity terminates an agent's authority is based on the policy that the principal's estate should be protected from potential fraudulent activity on the part of the agent. Some states have modified these common-law rules, allowing some acts of the agent to be binding upon other parties who were not aware of the termination.

further readings

Gregory, William A. 2001. The Law of Agency and Partnership. 3d ed. St. Paul, Minn.: West Group.

Hynes, J. Dennis. 2001. Agency, Partnership, and the LLC in a Nutshell. 2d ed. St. Paul, Minn.: West Group.

cross-references

Contracts; Fiduciary; Good Faith; Imputed; Liability; Master and Servant; Respondeat Superior; Vicarious Liability.

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Agency

AGENCY

The term "agency" denotes a part of the psychic apparatus that functions as a substructure governed by its own laws, but that is coordinated with the other parts.

In Freud's work this term first appeared in chapter VII of The Interpretation of Dreams (1900a), as a synonym or near-synonym for the term system, which he had been using for several years: "Accordingly, we will picture the mental apparatus as a compound instrument, to the components of which we will give the name of 'agencies' or (for the sake of greater clarity) 'systems."' (pp. 536-537) The term apparatus, used in a sense that never changed in Freud's work, explicitly gives the psyche a status comparable to that of the major organic systems (respiratory, circulatory, etc.).

An agency is thus a functional sub-whole, or, in modern terms, a substructure within an encompassing structure. This idea clearly came from Freud's extensive prior work in neurophysiology and then neurology. If Freud suggested in this text that the term system was "clearer," this is doubtless because it was more familiar to him. Indeed, he had been using it for years, particularly in "Project for a Scientific Psychology" (1950c [1895]), to evoke this type of functional groupings within the nervous system, whose workings he was trying to conceptualize at the time. He posited these systems as "producing" perception, consciousness, memory, and so forth. In the passage cited from The Interpretation of Dreams, he thus distinguished the agencies, or systems, of memory and perception (envisioned as being mutually exclusive), and censorship, but also the agencies that comprise his first topography: the unconscious, the preconscious, and consciousness (or perception-consciousness).

In Freud's writings from that point on, the terms agency and system remained close in meaning. However, system tended to be reserved for topographical distinctions, while agency was used more broadly to refer to an organization being considered from the topographic, dynamic, and economic viewpoints in combination. It is because they are considered in this way that the id, the ego, and the superego of the structural theory are referred to as agencies rather than as systems. Freud tended to posit the agencies as being exclusive: A single phenomenon cannot at the same time belong to the realm of the id and that of the ego, for example. By virtue of this very fact, when Freud at the end of his life came to see the opposition between conscious and unconscious as being simply a difference in "quality" of certain psychic processesas described in "An Outline of Psycho-Analysis" (1940a [1938])those two terms were no longer considered as denoting agencies.

In the conceptual architecture of metapsychology, the term agency is therefore situated at a level that makes its definition somewhat uncertain. Béla Grunberger thus generated heated controversy when he proposed, in Narcissism: Psychoanalytic Essays (1971/1979), to consider narcissism as an agency having the same status as the id, the ego, and the superego. Similar controversies arose over the concept of the self as developed by Heinz Kohut, for example.

Roger Perron

See also: System/systemic.

Bibliography

Freud, Sigmund. (1900a). The interpretation of dreams. Part I, SE, 4: 1-338; Part II, SE, 5: 339-625.

. (1940a [1938]). An outline of psycho-analysis. SE, 23: 139-207.

. (1950c [1895]). Project for a scientific psychology. SE, 1: 281-387.

Grunberger, Béla. (1979). Narcissism: psychoanalytic essays. (Joyce S. Diamanti, Trans.). New York: International Universities Press. (Original work published 1971)

Further Reading

Morrison, K. (1999). Agency, ontology, & analysis: R. Schafer's hermeneutic conflict. Psychoanalysis and Contemporary Thought, 22, 203-220.

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agency

agency The term agency is usually juxtaposed to structure and is often no more than a synonym for action, emphasizing implicitly the undetermined nature of human action, as opposed to the alleged determinism of structural theories. If it has a wider meaning, it is to draw attention to the psychological and social psychological make-up of the actor, and to imply the capacity for willed (voluntary) action.

Sociological theories are often characterized according to the relative emphasis they place on agency or structure—and in terms, therefore, of an agency versus structure debate. Some recent theorists have intervened in the debate in a conscious attempt to transcend this dualism. The French sociologist Pierre Bourdieu is a good example. Bourdieu is best known in the English-speaking world for his concepts of cultural capital and habitus, although his numerous books and articles also contain a full-blown theory of social order. The latter centres on the reproduction of contemporary culture—which favours the interests of those in power—via the differential distribution of knowledge through educational institutions. Especially in his later work, Bourdieu calls for a constructivist (see social constructionism) approach to sociology, transcending both essentialism and all ideas of the taken for granted in everyday life. His insistence that the objective and subjective aspects of social life are inescapably bound together leads him to challenge the dualism of macro versus micro and structure versus agency, in texts such as Outline of a Theory of Practice (1977), Reproduction in Education, Society and Culture (1977), Distinction (1984), Homo Academicus (1988), In Other Words (1990), The Logic of Practice (1990), and The Craft of Sociology (1991). It is not clear that these diverse texts form a systematic sociological project, far less solve the dualism of structure versus agency, but an argument to that effect has been constructed by (among others) Rogers Brubaker , ‘Rethinking Classical Theory: The Sociological Vision of Pierre Bourdieu’, Theory and Society (1985)
.

Similarly, the American sociologist Jeffrey Alexander argues for a multidimensional sociology, bringing together the metaphysical and empirical, individual volition and collective domination, and normative and instrumental action, notably in his four-volume Theoretical Logic in Sociology (1984). He also argues that Talcott Parsons came closer to achieving this synthesis than did any other sociological theorist. See also ACTION THEORY; STRUCTURATION.

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agency

a·gen·cy / ˈājənsē/ • n. 1. a business or organization established to provide a particular service, typically one that involves organizing transactions between two other parties: an advertising agency. ∎  a department or body providing a specific service for a government or similar organization: the Environmental Protection Agency. 2. action or intervention, esp. such as to produce a particular effect: a belief in supernatural agency. ∎  a thing or person that acts to produce a particular result: the movies could be an agency molding the values of the public.

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agency

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