What steps should an agent take when drafting an agency agreement?

When drafting an agency agreement, it is crucial for an agent to clearly define the relationship and outline the specific duties of both the agent and the principal. This clarity prevents misunderstandings and sets expectations for both parties involved in the agency. By outlining the relationship, the agreement delineates whether the agent is acting as a representative, a broker, or in another capacity, which impacts the rights, responsibilities, and authority of the agent.

Clearly defining duties ensures that both the agent and principal understand what is expected in the execution of their roles. It encompasses elements such as the scope of work, limitations of authority, and any specific tasks the agent is responsible for, which can include handling transactions, managing communication, or executing contracts.

Focusing solely on the time period or mentioning marketing strategies and performance metrics, while they may be relevant to some aspects of the agreement, do not address the fundamental need for clarity in the agent's authority and responsibilities. This makes defining the relationship and outlining duties the foundation of a well-structured agency agreement.