Agency Flashcards
1
Q
Agency relationship/authority
A
Generally, an agency relationship is created when one person (the principal) manifests an intent that another person (the agent) act on his behalf and both parties consent to the agreement.
A principal is contractually bound to the acts of the agent if the agent acted w/ actual or apparent authority.
Actual authority is authority that the agent reasonably thinks he possesses based on the principal’s dealings w/ him. Actual authority can be express (contained within the agreement) or implied from the actions of the principal. Apparent authority arises when the principal “holds out” the agent as having certain authority, causing third parties to reasonably believe the agent has such authority.
