Chapter 4- Agency & It's Responsibilities

Question 1

Agency

Answer 1

the authority (or power) to act in place of another, a principal (person who hires), to do a specified act for a stated period of time.
A contractual relationship in which an agent acts as a representative of a principal
Agency is a fiduciary relationship based on trust

Question 2

Principal

Answer 2

Client.
A person who hires or employs an agent to work for him or her.
The principal is liable for the acts and torts of the agent or employee committed within the course of an agency.
The principal is NOT liable for acts or torts of independent contractors

Question 3

Third Party

Answer 3

the other person in a contractual negotiation, other than the principal and his or her agent.
Agent is second party to transaction