GlossaryEN1 min readUpdated: Jun 23, 2026

Agency Agreement

The agency agreement serves to establish formal legal representation in freight and logistics operations: the principal authorizes an agent to negotiate, conclude contracts, or carry out tasks such as shipping, warehousing, or customs clearance on the principal's behalf and at the principal's expense.

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Last updated: 23 June 2026Published: 19 June 2025

Source: https://www.investopedia.com/terms/a/agency-agreement.asp

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Definition & Explanation

The agency agreement serves to establish formal legal representation in freight and logistics operations: the principal authorizes an agent to negotiate, conclude contracts, or carry out tasks such as shipping, warehousing, or customs clearance on the principal's behalf and at the principal's expense. All legal consequences of the agent's actions bind the principal directly; the agent operates strictly within the granted authority and does not become a contracting party in its own right. Customs brokers filing import declarations for importers, or freight forwarders appointing overseas agents for destination services, are textbook examples. The agency agreement is distinct from a commission agreement, where the commissionaire acts in its own name but on behalf of—and at the expense of—another party.

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