The need for a principal to hire an agent arises when the principal feels that he would individually be unable to cope with the huge workload and he needs help to act on his behalf with the same or nearly the same authority as his to keep the work going without ceasing. This might be because the subject activity would be a secondary occupation of the principal which he might not be able to give the same time and energy as his other commitments but which he would intend to keep running nevertheless.
Another reason for the need of an agent may arise when a business of an entrepreneur sprawls many different borders, and therefore would require a number of agents, each working on the behalf of the principal, managing the affairs of the business in their respective countries. Naturally enough, it is not possible for any principal to be in so many distant locations at the same time.
Also, a principal may start-up a business venture for which he has a particular skill set for the task at hand. The principal may however, be in need of different skill sets for the same business, required at different levels of the business. For instance, there are different departments in a business such as HR, Finance, Operation and all of them require qualified personnel to run their specific operations. Therefore, the need to hire an agent may also arise courtesy of a lack of skills on the part of the principal in a field relevant to the business.
Agencies are good examples of Wakala because they act on behalf of other individuals, in the same capacity as theirs, to perform an action required by them, for a sum of fee.
Since the agents take full legal authority of the subject principals, the choice of agents or agencies is crucial. Trustworthiness is the main factor that determines the choice of agents to be hired and assumed such high a status, the same as that of the principals. Competent family members and, or, next-of-kin are the best choice for many principals who hire them for want of trustworthiness and acquaintance. The principals want to be dead sure that they are entrusting their assets, albeit temporarily, to safe, honest and competent hands.
References via family members and relatives are another major source of hiring Wakala as the guarantors duly guarantee their actions and claim to be liable in case of any loss to the principals.
However, despite the strict scrutiny at the selection stage, consistent checks and balances are enforced by most of the principals over the agents to ensure that everything is under control. Wakala hence play's a very helpful role for the principals by managing their diverse requirements with their skills and their time.