Universal agent
Universal agent - is the person authorized to carry out all business decisions on behalf of the principal. It deals with ordering warehouse assortment, issuing ordered goods to customers or signing binding trade agreements. He may have limited access to the company's bank account to settle all his obligations. This is not very common as companies are more inclined to grant special powers of attorney or general powers of attorney. Very often, such a power of attorney is granted to persons who are the real owners of the companies. This is because they do not want to belong to the management board (and therefore be responsible for the company's affairs), they want to be able to make independent decisions. In such a situation, they are granted universal agencies so that they act as a member of the board of directors, without being held responsible.
Scope of agent
A proxy is a person who has been authorized by the principal to perform the task:
- activities of ordinary management;
- a particular activity;
- activities of ordinary management and activities exceeding ordinary management.
About the possession of the title of "general agent", the person concerned performs all the above-mentioned activities.
General agent in future
With the advancing technology, it becomes possible to program complex algorithms that can handle a variety of transactions. One of them is concluding contracts or handling transactions (e. g. delivery). For the time being, people are used for such activities. However, there are also processes automating a given phenomenon. For example, a large part of the orders are processed automatically - and a person is only supposed to confirm the conformity of the order.
It's the same as signing a contract. Now it is not necessary for a person to be on the spot, but to sign a contract, e. g. sitting in a café on the other side of the globe.
All the above actions can be performed by a digitalised general agent. This means that based on the written algorithm and then machine learning, the software or hardware would get used to the behavior of the entity it represents. Then, he would do all the work that is now being done by human general agents such as, among other things[1]:
- Representation of the client in all trading transactions;
- Conclusion and termination of contracts
- Conducting negotiations with other digitalised general agents.
Moreover, it is assumed that most of the contracts requiring the above-mentioned rights will be executed via the Internet. Mainly with the use of a distributed blockchain network, which enables the safe execution of transactions. Moreover, it is a network that makes it possible to make cash available only after the transaction is completed (to avoid the phenomenon of an agent acting without authorization).
Code of conduct
Each general agent must follow the general code of conduct. Above all, it requires that he always acts for the benefit of his principal. Also, it should not interact with persons with whom it may be referred to as a "conflict of interest"[2].
Additionally, he should verify the scope of his authority granted by the Principal each time. Otherwise, the phenomenon of "falsus procurator" may occur, i. e. acting without authorization. However, if the power of attorney is exceeded, the general agent is liable for any damage caused to his principal and to a third party who has suffered damage through his fault[3].
Examples of Universal agent
- A universal agent may be a financial advisor who is authorized to make decisions on behalf of a company's shareholders. He or she has the authority to buy and sell stocks, bonds, and other financial instruments, as well as to manage investments.
- A universal agent may also be a lawyer who is granted the authority to make decisions regarding legal matters for a company. This could include drafting contracts, filing lawsuits, and negotiating settlements.
- A universal agent may also be a business consultant who is authorized to make decisions on behalf of a company. This could include decisions related to marketing, product development, and strategic planning.
- A universal agent may also be a real estate broker who is authorized to make decisions regarding the purchase and sale of properties on behalf of a company. He or she would be responsible for finding suitable properties, negotiating prices, and coordinating the closing of the deals.
Advantages of Universal agent
The main advantages of having a Universal Agent are:
- Flexibility - The Universal Agent provides the ability to make decisions quickly and easily without having to go through a lengthy process of consultation and approval. This helps to ensure that the right decisions can be made at the right time.
- Expertise - The Universal Agent is an expert in the field, and can make decisions based on their knowledge and experience. This helps to ensure that the decisions are made in the best interests of the company.
- Accountability - The Universal Agent is held accountable for their decisions, meaning that they are responsible for any consequences that arise from their decisions. This helps to ensure that the decisions are made in the best interests of the company and its shareholders.
- Independence - The Universal Agent is independent from the company and can make decisions without being influenced by the company’s interests. This means that decisions can be made objectively, without the pressure of the company’s interests.
Limitations of Universal agent
A Universal Agent is a powerful position, but it does carry some limitations. These limitations include:
- Limited Access to Bank Account - A Universal Agent is usually only granted limited access to a company's bank account for the purpose of settling their obligations. This prevents them from making any unauthorized transactions or withdrawals.
- Lack of Responsibility - Despite having the power to make decisions on behalf of the principal, a Universal Agent does not have any legal responsibility for the actions they take. This means that any mistakes or errors made are usually the responsibility of the principal and not the agent.
- Limited Scope - A Universal Agent's power is limited to the scope of their authority. This means that they are only able to make decisions related to their specific job duties. Any decisions that fall outside of this scope must be approved by the principal.
- Time Limits - A Universal Agent's authority is usually limited to a specific period of time. This means that the agent will only have the power to make decisions within that time frame and any decisions made outside of it will not be valid.
A universal agent is a person authorized to make decisions on behalf of the principal, including ordering warehouse assortment, issuing ordered goods to customers and signing binding trade agreements. There are other approaches related to universal agents which include:
- Acting as a fiduciary: A fiduciary is a person or entity that acts in a legal capacity to oversee and manage assets on behalf of another person or entity. This can include a trust, an estate, or a business. The universal agent acts as a fiduciary, ensuring that assets are managed responsibly and in the best interests of the principal.
- Acting as a representative of the principal: The agent acts as the representative of the principal in matters concerning the business, including negotiating contracts, signing documents, and attending meetings. The agent is expected to act in the best interests of the principal and to follow the instructions of the principal.
- Acting as an advisor: The agent provides advice and guidance to the principal on matters related to the business. This includes providing information on legal and regulatory matters, financial matters, and other business-related matters.
In summary, a universal agent is a person authorized to make decisions on behalf of the principal. Other approaches related to universal agents include acting as a fiduciary, a representative, and an advisor.
Footnotes
| Universal agent — recommended articles |
| Fiscal Agent — Agency Broker — Mercantile agent — Sub broker — Reinsurance broker — Local agent — Selling away — Special power of attorney — Corporate opportunity doctrine |
References
- Lohn L., Schawrz P. (2012), The regulation of proxy advosiors, Capital Markets Law Journal, vol. 8, no. 1, p.100-104
- Surden H. (2014), Machine Learning and Law, University of Colorado Law School, Colorado, Law Scholarly Commons, p.90-99
- Yuk-fai F., Jin L. (2016), Relational Contracts, Limited Liability, and Employment Dynamics, p.1-4
Author: Marta Cader
