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What is a Sub-Agent or Delegate?

Insight about sub-agents under a Power of Attorney

Updated 2 February 2023 · 11 min read

This page explains

What Is A Sub-Agent?

A sub-agent is a legal entity appointed by an agent to perform tasks that the agent is authorized to perform on behalf of the principal.

Original Or Successor Agent May Appoint Sub-Agent

A sub-agent is a legal entity appointed by an agent, to perform tasks that the agent has consented to perform on behalf of the agent’s principal.

In Florida appointing sub-agents under a Power of Attorney for a person⁶ is prohibited,⁷ unless:-

• the principal is a commercial entity (in which event legislation that prevents the appointment of a sub-agents does not apply)
• the Power of Attorney is for a person and for purposes excluded from the ambit of the legislation

Appointment of Sub-Agent By A Successor Agent

As to whether any right to appoint a sub-agent extends to permit a successor agent to appoint a sub-agent:-

New York & Illinois

In New York and Illinois:-

• legislation does not prohibit the appointment of sub-agents under a Power of Attorney for a person¹⁰ and

• the topic of sub-agents is touched upon in the government form in positive terms and it seems reasonable to assume that if appointment of a sub-agent by an agent is permitted, this entitlement extends to a successor agent

Authorizing Sub-Agents Has Advantages

There is always a risk that for a period of time, an agent or successor agent has a personal crisis, overseas commitment or similar.

The ability to appoint sub-agents is a good way to reduce risks associated with an agent or successor agent being unable to perform as an agent or successor agent, risks that might include them resigning.

Subject to considerations like for example, imposing class conditions requiring a sub-agent to perhaps be a certain age, have certain qualifications or similar, it may be prudent to include authority in a Power of Attorney permitting an agent or successor agent to appoint sub-agents.

Of course, a principal may perceive an entitlement on the part of an agent or successor agent to appoint sub-agents to involve unreasonable risks.

Considerations Relating To Sub-Agents

A prudent principal would presumably ensure that the role of sub-agents are defined in any Power of Attorney under which they are authorized to be appointed, including terms dealing with:-

• liability for their actions
• the revocable nature of their appointment
• right of an appointing agent to impose conditions in respect of their appointment
• whether any kind of legal entities may be appointed as a sub-agent
• controls upon remuneration or expenses paid to sub-agents
• entitlement of a sub-agent to appoint a sub-agent

Other considerations might include, for example, whether one of the following approaches is suitable:-

• naming a series of candidates in the Power of Attorney, specifying whether they are to be appointed in the order they are named or otherwise
• naming a series of candidates in the Power of Attorney, to be appointed in the order they are named or otherwise and authorizing an agent or successor agent to appoint someone else of their choice, if all of the named the candidates are either ineligible or appointed
• naming a series of candidates in the Power of Attorney, specifying that the named candidates are to be appointed in the order they are named or otherwise and authorizing an agent or successor agent to appoint someone else of their choice, whether or not all the candidates are either ineligible or appointed
• allowing an agent or successor agent to appoint anyone of their choice

Appointment Of A Sub-Agent For More Than One Agent

A prudent principal would consider whether or not a sub-agent is authorized to be appointed as a sub-agent for more than one agent at the same time.

Considerations might include for example, how things work where:-

• two agents with authority to perform different tasks appoint a single sub-agent who can in turn, perform all of the different tasks either of them can perform
• two agents with authority to perform a particular task by agreement appointing a sub-agent and in particular, whether the sub-agent may perform that task independently

Excluding authority to appoint the same legal entity as a sub-agent tends to reduce the number and complexity of the issues at stake and may be preferable, as opposed to prohibiting the appointment of sub-agents.

Third Restatement Of The Law Agency - 2006

Sub-Agents, Sub-Servants, Delegates & Liability For Actions

In the Second Restatement of the Law Agency published in 1958 by the American Law Institute, a “sub-servant” was observed to be:

“a person appointed by a servant empowered to perform functions undertaken by the servant for the master and subject to the control as to his physical conduct both by the master and by the servant, but for whose conduct the servant agrees with the principal to be primarily responsible”.

In addition to the notion of sub-servants, from time to time we also find mention of “delegates”.

Difference Between Sub-Agents, Delegates & Sub-Servants

It seems the term “sub-servant” is synonomous with “sub-agent” at least as they appear in the Restatements of the Law of Agency published in 1958 and 2006, as referred to above.

Upon the question of what is the difference between a sub-agent, sub-servant and delegate, it is fair to say:-

• all of these descriptors are used to refer to persons who assume tasks otherwise authorized to be performed by an agent or successor agent

• it seems sensible to differentiate a sub-agent and a delegate upon grounds that:-

  • liability for the actions of a sub-agent falls upon the appointing agent or successor agent
  • liability for the actions of a delegate falls upon the principal

• beyond liability for their actions, other indicia that may distinguish a sub-agent from a delegate include:-

  • whether termination of their appointment is controlled by the principal or the appointing agent or successor agent (or both)
  • whether the appointing agent or successor agent or the principal is responsible for determining their entitlements or paying them
  • from whom a sub-agent is entitled to indemnity, let’s say for example in the context of a liability they acquire in the course of acting as a sub-agent

• it seems the term “sub-servant” is synonomous with “sub-agent” at least as they appear in the Restatements of the Law of Agency published in 1958 and 2006, as referred to above

The considerations above illustrate the fundamental position, that:-

• what constitutes a sub-agent or delegate is very much a matter of how the principal sees fit to define the roles of any such officeholders
• there is no ‘standard definition’ of the role of a sub-agent or delegate with regard to the kinds of issues referred to above
• every principal should define their preferences in terms of how the appointment of a sub-agent or delegate operates

A Special Word About California

California is the only one of the Six (6) Greater States that says anything about liability of a sub-agent in its legislation.

§4205 assigns responsibility for the actions of a sub-agent¹¹ to the agent who appointed them, by providing:-

"An attorney-in-fact may revocably delegate authority to perform mechanical acts to one or more persons qualified to exercise the authority delegated.

(b) The attorney-in-fact making a delegation remains responsible to the principal for the exercise or nonexercise of the delegated authority."

Notably in California, §4101 identifies non-variable provisions in the legislation and §4101 does not exclude from potential variation the effect of §4205 (which deals with appointment of sub-agents) seemingly leaving open the possibility that a principal may define liability for the actions of a sub-agent¹² however they see fit, which seems correct given the use of the term “default rule” in the extract below.

More Insight About California

The following extract from the 1994 California Law Revision Commission Report which led to enactment of Division 4.5 of the Probate Code is informative, speaking of law as it was prior to the amendments and proposed changes (footnotes are in brackets):

"Existing law is unclear on the extent to which an… [agent] may delegate authority under a power of attorney for property. The Power of Attorney statutes are silent on the matter, but the general agency statutes permit delegation (1) if the act is “purely mechanical,” (2) if the act cannot be performed by the… [agent] but can be by the subagent, (3) if it is the “usage of the place” to delegate the authority, or (4) if the delegation is authorized by the principal. (Civ. Code § 2349) Under these general rules, a subagent is not responsible to the principal, nor is the original… [agent] responsible to third persons for the acts of a “lawfully appointed” subagent. (Civ. Code §§ 2022, 2350, 2351; see also Civ. Code § 2400.5, proxy given by agent to exercise stock voting rights). The language of these sections seems more appropriate to business agencies than to the type of Power of Attorney prepared by an individual to manage private affairs.

As the default rule, the proposed law permits delegation of mechanical acts. However, unlike the general agency rule, the original… [agent] remains responsible to the principal for the exercise of the authority delegated."

A Workaround For Florida

In Florida appointing sub-agents is not permitted, if the principal is a person¹³ (see §709.2114(b)).

For a person in Florida creating a Power of Attorney for a person not excluded from the ambit of the legislation, who might contemplate authorizing the appointment of sub-agents but for §709.2114(b), there may be a partial solution achieved by:-

• appointing an agent with authority to perform the same tasks as all of the other agents
• recording a direction or other terms, limiting the entitlement of that agent to perform the authorized tasks other than where they are acting under direction of another agent, requiring the agent to comply with these terms etc.

For someone in Florida who needs to ensure an agent can arrange someone else to perform a task they are otherwise authorized to perform, this may be some sort of solution, if a lawyer agrees.

Powers of Attorney for Commercial Entities & Excluded Purposes

As a matter of principle, there is nothing to prevent the principal in respect of a Power of Attorney for a commercial entity or a Power of Attorney for a person for a purpose excluded from the ambit of the legislation from including authority to appoint sub-agents.

What Is A Sub-Agent

• An agent or successor agent may be authorized to appoint sub-agents
• Authorizing the appointment of sub-agents has advantages
• Considerations relating to sub-agents
• Extracts from the Third Restatement of the Law of Agency about sub-agents
• Sub-agents, sub-servants, delegates and liability for actions
• A workaround for Florida