Business Law 21 - 25

A relationship between two parties that allows one of the parties to act so as to legally bind the other.

• Agency

• Principal

• Agent

• Scope of Authority

The person who authorizes another to enter into legal relationships on his or her behalf.

• Agency

• Agent

• Principal

• Authority

The party authorized by the principal to act on his or her behalf.

• Agency

• Principal

• Agent

• Implied Authority

The range of acts authorized by the principal.

• Express Authority

• Gratuitous Agency

• Implied Authority

• Scope of Authority

Written or oral direct communication of authority by the principal or agent.

• Express Authority

• Implied Authority

• Gratuitous Authority

• Apparent Authority

Any writing that appoints someone as an agent.

• Scope of Authority

• Apparent Authority

• Power of Attorney

• Ratification

The principal’s approval of a previously unauthorized act or an act outside the agent’s scope of authority.

• Authority

• Express Authority

• Implied Authority

• Ratification

Duties owed by agents to principals that require an agent to put the best interests of the principal ahead of his or her own.

• Duty of Accounting

• Duty of Loyalty

• Fiduciary Duties

• Commingling

An agent may not secretly benefit from the agency transaction.

• Duty of Obedience

• Duty of Accounting

• Duty of Confidentiality

• Duty of Loyalty

An agent must obey the instructions of the principal.

• Duty of Accounting

• Duty of Loyalty

• Duty of Authority

• Duty of Obedience