Business Law - Chapter 17

An agent acts on behalf of and instead of the principal in dealing with third parties.

• Agreement: Express consent or implied 
• Ratification: The principal either by act or by agreement ratifies the conduct of a person who is not in act an agent.
• Estoppel: The principal caused a third person to believe that another person is the principal's agent, and the third person acts to his or her detriment in reasonable reliance on that belief.
• Operation of law: agency relationship is based on a social duty or fomed in emergency situations.

• Performance
• Notification
• Loyalty
• Obedience
• Accounting

• Compensation
• Reimbursement and indemnification
• Cooperation
• Safe working conditions

• Express Authority
• Implied Authority
• Apparent Authoirty
• Ratification

• Oral or in writing
• Must be in writing if the contract must be in writing

Authority customarily associated with the position of the agent or authoirty that is deemed necessary for the agent to carry out expressly authorized tasks

Exists when the principal, by word or action, causes a third party reasonably to believe that an agent has authority to act, even though the agent has no express or implied authority

Affirmation by the principal of an agent's unauthorized action or promise. For the ratification to be effective, the principal must be ware of all material facts.

• Principal if identity is disclosed or partially disclosed at the time of the agent forms a contract with a third party
• Agent if the principal's identity is undisclosed. If the agent acted within the scope of his/her authority, the principal is also bound by the contract

Principal is liable if the agent was acting within the scope of his/her authority, the principal is also bound by the contract

• The acts are committed within the scope of employment
• The employer knew or should have known that the employee has a propensity for committing tortious acts
• The employer allowed the employee to engage in reckless acts that caused injury to another
• The agent's misrepresentation causes a third party to sustain damage, and the agent had either actual or apparent authority act

Hazardous activities are involved

The principal participated by conspiracy or other action or if the agent violated certain government regulations in the course of employment

• Lapse of time
• Purpose achieved
• Occurrence of a specific event
• Mutual agreement
• Termination by one party

• Death or insanity
• Impossibility
• Changed circumstances
• Bankruptcy
• War

• By act of the parties - notice to third party is required. Direct notice for those who have previously dealt with the agency, but constructive notice will suffice for all other third parties.
• By operation of law - notice to third parties is not required