The principal is the person who „hires“ or hires the agent (although there is normally no employment relationship between the two). The agent is the person acting on behalf of the sponsor. In an agency contract, the agent undertakes to assume certain responsibilities and the contracting authority agrees to entrust the agent with certain responsibilities so that the agent can act for the client in the specific situations described in the agreement. An example of the existence of an agency contract, cited in a 2006 court case, emerged when a tennis sponsor sued Venus and Serena Williams for non-participation. The sponsor claimed that his father, Richard Williams, had committed to participate in the tournament. The Williams sisters argued that their father did not have the authority to bind them to such an agreement. If her father hired the sisters to play, the court must decide whether there was a valid agency contract between the Williams sisters and their father. If not, they were probably not bound by his agreement under the Agency`s legislation. [needs to be updated] In addition to the convenience of letting someone act on your behalf, an agency contract can also arise from necessity. For example, if you are faced with a legal case, you will probably need to be represented by a qualified lawyer. The appointment of this lawyer constitutes an agency contract between you and the lawyer and authorizes the lawyer to act on your behalf.
Within the European Union, there is legislation to offer agents some protection, in particular the right to compensation in certain circumstances when an agency is dismissed. . . .