Agency Law

Concept

Agency Relationships

An agency exists when one person (agent) acts on behalf of another (principal) with the principal's consent. The principal is bound by the agent's authorized acts. Types of authority: actual (express or implied), apparent, and ratification.

Example

Apparent Authority

Even if an agent lacks actual authority, if a third party reasonably believes the agent has authority based on the principal's conduct, the principal is bound. Example: a company lets an employee use business cards with the title 'VP of Sales' — third parties can rely on that title.

Key Point

Agent Duties

Agents owe the principal fiduciary duties: loyalty (no self-dealing), obedience (follow reasonable instructions), care (act with reasonable skill), accounting (keep records), and notification (disclose material information).

Contract Performance & Remedies

Business Structures

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Practice questions from this module to reinforce what you learned.

Practice Questions