# Agency Relationship

*Last updated: 2026-06-23*

> An agency relationship is a legal arrangement in which one party – the agent – is authorized to act on behalf of another – the principal – with binding effect on that principal in dealings with third parties.

An agency relationship is a legal arrangement in which one party – the agent – is authorized to act on behalf of another – the principal – with binding effect on that principal in dealings with third parties. In freight and customs practice, this arises when a freight forwarder or customs broker signs transport documents, files declarations, or negotiates freight terms on behalf of a shipper or consignee. The defining feature is external representation: the agent's actions legally commit the principal, provided the agency is apparent or disclosed. This distinguishes an agency relationship from a standard service contract, where the contractor acts without creating obligations toward outside parties. The distinction is practically significant because it determines who is contractually bound when disputes or errors arise with third parties.

**Source:** [https://en.wikipedia.org/wiki/Agency_(law)](https://en.wikipedia.org/wiki/Agency_(law))

## Quick Facts

| Property | Value |
|---|---|
| Term | Agency Relationship |
| Language | EN |
| Word count | 128 |
| Last updated | 2026-06-23 |
| Source | https://en.wikipedia.org/wiki/Agency_(law) |

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