Key Terms
Agent
The person authorized to act for or in place of another.
Principal
The person who authorizes another to act on their behalf.
Fiduciary relationship
One party has a duty to act for the benefit of the other on matters within the scope of the relationship. Requires trust
Other fiduciary relationships for context
Doctor-patient, attorney- client, accountant-client, trustee-beneficiary, guardian-child. Agent- principal is in the sam
Disclosed principal
Identity is revealed by the agent to the third party. Most common.
Partially disclosed principal
Existence is known but identity is not. The third party knows an agency relationship exists but doesn't know who the pri
Undisclosed principal
Identity AND existence are kept secret. The third party thinks they're just dealing with the agent directly.
General agent
Authority to transact ALL of the principal's business of a particular kind or in a particular place. Examples: partners,
Special agent
Authority to conduct only a PARTICULAR transaction or perform a SPECIFIC act. Examples: realtors, athlete's agents, empl
Authority
The right or permission to act legally on another's behalf.
Actual authority (real authority)
The principal intentionally confers authority on the agent. Two subtypes:
Express authority
Given by express agreement, oral or written. Implied authority: arises from the principal's conduct — not explicitly sta
Apparent authority
Authority a third party REASONABLY BELIEVES the agent has, based on the principal's words or actions — even if no actual
Three elements required for apparent authority
1. The principal's words or actions lead others to believe the agent has authority.
Ratification
When a DISCLOSED principal adopts or confirms a contract entered into by an agent who had NO authority at the time.