An Agency Agreement is a contractual agreement between two parties–the agent and the principal–in which the agent agrees to represent the principal in completing business transactions. This agreement outlines the scope of the work, the obligations of both parties, and any applicable compensation or commission that may be due. As such, it can help ensure that all parties are on the same page when forming a business relationship. It serves as a key document in clarifying goals, expectations, and responsibilities between employer and employee, ensuring that all parties involved have a clear understanding of their roles.