Umboðsaðili

Umboðsaðili is a person or organization authorized to act on behalf of another person or entity, the principal, in legal or business matters. The authority is granted through an umboð or similar mandate and can be limited to specific tasks or broad in scope. The umboðsaðili may negotiate contracts, sign documents, collect payments, or represent the principal in meetings and negotiations, as long as these acts stay within the granted authority. The principal is typically bound by the umboðsaðili’s acts performed within the scope of authority, while acts outside that scope can create liability for the agent or the principal and may affect third parties’ rights under apparent authority.

Duties of an umboðsaðili include acting loyally and in good faith toward the principal, avoiding conflicts of interest, following instructions, and maintaining accurate records. The agent should inform the principal of material developments and seek clarification when necessary. The relationship can be terminated by revocation of authority, completion of the designated task, expiry of the mandate, or the death or incapacity of either party. In practice, umboðsaðili arrangements are common in commercial settings such as sales, procurement, legal representation, and financial transactions. A typical example is an employee or external representative empowered to sign contracts on behalf of a company, or a lawyer acting for a client.

See also: power of attorney, agency, representation, fiduciary duty.