This section is from the book "The Law Of Contracts", by William Herbert Page. Also available from Amazon: Commercial Contracts: A Practical Guide to Deals, Contracts, Agreements and Promises.
An agent is one appointed to transact business and to make contracts with third persons in place of and on behalf of the person appointing him, known as the principal.1 If the facts exist which in law create the relation of principal and agent such relationship exists though the parties may not have intended such facts to have such legal effect,2 or though they may have expressly agreed that such should not be the legal effect.3 Thus an ostensible lease of a mill, the lessee to conduct the business for a fixed salary and a certain per cent of the profits is a contract of agency.4 On the other hand, one who is really the adversary party cannot change the nature of the transaction by stipulating that he is merely an agent.5 Agency has therefore a two-fold aspect. It is, on the one hand, a contract between principal and agent, which does not differ as to its fundamental principles from other contracts; on the other hand, it is a means of bringing the principal into contractual relations with persons with whom in point of fact he has had no personal dealings. In this chapter there will be presented only the general principles of the law of agency affecting the rights and liabilities of parties dealing with the principal through the agent. The question of the rights of principal and agent between themselves is a special branch of contract law, and is out of place in a general work on contract.
1 Central, etc., Co. v. Bank, 101 Ga. 345; 28 S. E. 863; Upham v. Richey, 163 111. 530; 45 N. E. 228; Metzger v. 'Huntington, 139 Ind. 501; 37 N. E. 1084; 39 N. E. 235; Barbar v. Martin, - Neb. - ; 93 N. W. 722; Elwell v. Coon (N. J. Eq.), 46 Atl. 580.
2 Bradstreet Co. v. Gill, 72 Tex.
115; 13 Am. St. Rep. 768; 2 L. R. A. 405; 9 S. W. 753.
3 Hall v. Ins. Co., 23 Wash. 610; 51 L. R. A. 288; 63 Pac. 505.
4 Petteway v. McIntyre, 131 N. C. 432; 42 S. E. 851.
5 So in gambling transaction. Munns v. Commission Co., 117 Ia. 516; 91 N. W. 789.