What does "sub-agency" refer to in the context of agency relationships?

In the context of agency relationships, "sub-agency" specifically refers to the delegation of authority from one agent to another. When a primary agent, who holds a fiduciary obligation to a principal, appoints another agent to act on their behalf, this creates a sub-agency relationship. The sub-agent then assumes responsibility for acting under the direction of the primary agent while still ultimately representing the interests of the principal.

This arrangement is significant because it expands the reach of the primary agent's authority through the sub-agent, allowing for broader representation and service to the principal. It is critical that all parties involved understand the dynamics of this relationship, as the principal typically holds the primary agent accountable for the actions of the sub-agent.

Other options like representing multiple clients or a broker acting on behalf of a client do not accurately capture the essence of sub-agency. While an agent can represent multiple clients, this relates more to the concept of dual agency rather than sub-agency. Similarly, a broker acting on behalf of a client does not imply the delegation of authority inherent in a sub-agency arrangement.