Agency By Necessity

AAA

DEFINITION of 'Agency By Necessity '

A type of relationship whereby one party can make essential decisions for another party. Agency by necessity is recognized in the courts and typically applies when one party is unable to make.

INVESTOPEDIA EXPLAINS 'Agency By Necessity '

If, for example, an individual is sick and unable to make a critical decision, agency of necessity would allow an attorney, parent or spouse to make decisions on behalf of the incapacitated party.

Agency by necessity refers to a situation where an agent by necessity makes a critical decision on behalf of another party who is not in a condition to do so. For example, if Person A was severely injured in a car accident and was in a coma, Person B could make the decision to allow medical staff to operate on Person A. Under normal circumstances, Person A would have to give consent, but if he or she was unable to do so, an agent can make the decision instead.

RELATED TERMS
  1. Principal-Agent Relationship

    An arrangement in which one entity legally appoints another to ...
  2. Final Prospectus

    1. The final version of a prospectus for a public offering of ...
  3. Prospectus

    A formal legal document, which is required by and filed with ...
  4. Power Of Attorney

    A legal document giving one person (called an "agent" or "attorney-in-fact") ...
  5. Underwriting

    1. The process by which investment bankers raise investment capital ...
  6. Agent

    1. An individual or firm that places securities transactions ...
Related Articles
  1. Options & Futures

    Three Documents You Shouldn't Do Without

    Estate planning is not just about the division of assets after you die. Read on to save your loved ones extra grief.
  2. Options & Futures

    Your Will: Why You Need A Power Of Attorney And Beneficiaries

    What would happen if you were suddenly unable to manage your financial affairs? Preparation is the best protection.
  3. Retirement

    The Top 3 Retiree Worries (And What To Do About Them)

    Discover the most common problems retirees face, and what they can do to solve them.
  4. Mutual Funds & ETFs

    How To Start A Hedge Fund In Canada

    Would-be hedge fund managers in Canada need to understand the laws and regulations that must be followed in order to start a fund in the country.
  5. Professionals

    Top Tips for Family Wealth Transfers

    Essential tips for tackling family wealth transfers.
  6. Taxes

    Is It Smart To Get Dual Citizenship?

    Does it ever make sense to be a citizen of the U.S. and somewhere else? Yes, so you can work minus a visa – not so much, if you get drafted into the army.
  7. Retirement

    Expat In America: Visas To Retire In the U.S.

    It isn't easy for non-citizens to retire in the United States unless a family member is already a citizen. But some visas will allow for longer visits
  8. Mutual Funds & ETFs

    The Impact of the Janus Market Timing Ruling

    A look at the impact of the Janus Supreme Court ruling on market timing.
  9. Options & Futures

    Get To Know These Crucial US Options Market Regulations

    How are options regulated in the U.S and which organizations are involved in options market regulations?
  10. Economics

    The Impact Of Ending The US Embargo On Cuba

    Many argue that ending the US embargo on Cuba will not only make US consumers happy, but also help the US economy and bring more freedoms to Cuba.

You May Also Like

Hot Definitions
  1. Loan-To-Value Ratio - LTV Ratio

    A lending risk assessment ratio that financial institutions and others lenders examine before approving a mortgage.
  2. DuPont Analysis

    A method of performance measurement that was started by the DuPont Corporation in the 1920s. With this method, assets are ...
  3. Asset Class

    A group of securities that exhibit similar characteristics, behave similarly in the marketplace, and are subject to the same ...
  4. Fiat Money

    Currency that a government has declared to be legal tender, but is not backed by a physical commodity. The value of fiat ...
  5. Interest Rate Risk

    The risk that an investment's value will change due to a change in the absolute level of interest rates, in the spread between ...
  6. Income Effect

    In the context of economic theory, the income effect is the change in an individual's or economy's income and how that change ...
Trading Center