What's the Difference Between a Designated Agent and an Authorized Agent? Analyzing Three Characteristics of an Authorized Agent

The concepts of designated agents and entrusted agents are two common terms in the legal field, and they have distinct differences in practical applications. Understanding the distinctions between the two helps to better comprehend the relevant legal relationships and their scope of application. This article will discuss the definitions of entrusted agents and designated agents, with a focus on analyzing the three main characteristics of entrusted agents.

Firstly, we need to clarify what an entrusted agent is. An entrusted agent refers to an agent produced through the authorization act by the principal. This means that the entrusted agent is not appointed by a third party or court but is the result of the principal's active choice. For example, during commercial transactions, enterprises may hire lawyers as representatives for their legal affairs. In this case, the lawyer becomes the enterprise's entrusted agent. According to relevant provisions of the Civil Code of the People's Republic of China, the authority of an entrusted agent originates from the authorization of the principal. Therefore, entrusted agents must exercise their rights within the authorized scope.

So, what are the three features of an entrusted agent? First, the authority of an entrusted agent has a clear source. As mentioned earlier, the authority of an entrusted agent comes from the authorization act of the principal. The principal can grant corresponding permissions to the entrusted agent through written form, oral communication, or other legitimate channels. It is worth noting that the authorization should be specific and clear to avoid disputes caused by ambiguous expressions.

Secondly, the authority of an entrusted agent is limited. Although entrusted agents have certain autonomy in handling affairs, their actions still need to strictly follow the instructions of the principal. If an entrusted agent acts beyond the authorized scope, it may constitute unauthorized agency and even lead to legal liability. For instance, if a company employee signs a contract without authorization and causes economic losses to the company, the employee may need to bear compensation responsibility.

Thirdly, the entrusted agency relationship has the possibility of termination. Once the authorization period expires or the principal revokes the authorization, the entrusted agency relationship terminates. When an entrusted agent loses civil capacity, their qualification as an agent also ceases. This indicates that the entrusted agency relationship is not permanent but is influenced by various factors.

In contrast, a designated agent is one produced by a third-party institution such as a court or related parties. For example, in inheritance cases, if the heirs cannot reach an agreement, the court may appoint a lawyer as the estate administrator to handle the distribution of assets. Unlike entrusted agents, designated agents do not rely on the intentions of the principal but are based on external intervention.

From the above analysis, it can be seen that there are significant differences between designated agents and entrusted agents in terms of generation methods, rights and obligations, and legal status. However, regardless of the type of agent, their core purpose is to protect the legitimate rights and interests of the parties. In actual operations, parties should fully consider their own needs and reasonably choose suitable agent types while ensuring that the agency behavior complies with legal regulations to maximize the avoidance of potential risks.

Finally, it is worth noting that Article 163 of the Civil Code clearly stipulates Agency includes entrusted agency and statutory agency. Thus, entrusted agency is only part of the agency system. With the development of social economy, the agency system is also continuously improving. In the future, we look forward to seeing more research results on the agency system to provide more solid theoretical support for judicial practice.