Key Terms
Agency
A fiduciary relationship, created by express contract or implied actions, in which an agent has authority to act on beha
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 is under a duty to act for the benefit of the other on matters within the scope of the relationship. Requires
Disclosed principal
Identity is revealed by the agent to the third party. Most common type.
Partially disclosed principal
Existence is known to the third party, but identity is not. The third party knows an agency relationship exists but does
Undisclosed principal
Identity is kept completely secret. The third party may not even know an agency relationship exists and may believe the
General agent
Authority to transact all of a principal's business of a particular kind or in a particular place. Examples: partners, m
Special agent
Authority limited to a particular transaction or specific act. Examples: realtors, athlete's agents, employment recruite
Authority
The right or permission to act legally on another's behalf.
Actual authority (also called real authority)
Principal intentionally confers authority on an agent. Two subtypes:
Express authority
Given by an express agreement, oral or written.
Implied authority
Granted as a result of the principal's conduct.
Apparent authority
Authority a third party reasonably believes an agent has, based on the third party's dealings with the principal. The pr
Example
A principal fails to notify third parties that an agent no longer works for them. That former agent can still bind the p