Key Terms
Agent
Person authorized to act on behalf of a principal. Agency: fiduciary relationship where agent acts on behalf of and lega
Principal
The person who authorizes another to act on their behalf.
Agency
A fiduciary relationship (created by express contract or implied actions) in which the agent has authority to act on beh
Fiduciary relationship
A relationship where one party is under a duty to act for the benefit of the other on matters within the scope of the re
Examples of fiduciary relationships
Doctor-patient, attorney-client, accountant-client, trustee-beneficiary, guardian-child. Agents are fiduciaries of princ
Disclosed principal
Identity is revealed by the agent to the third party. Most common type.
Partially disclosed principal
Existence is revealed but not identity. Third party knows an agent represents someone; just doesn't know who.
Example
If a principal declares bankruptcy and the real property the agent is authorized to sell is included in the bankruptcy e
Undisclosed principal
Identity is kept secret by the agent. Third party may not even know an agency relationship exists; they think the agent
General agents
Authority to transact all of a principal's business of a particular kind or in a particular place. Examples: partners, m
Special agents
Authority only to conduct 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 (also called real authority)
Principal intentionally confers authority on agent.
Apparent authority
Authority a third party reasonably believes an agent has, based on the third party's dealings with the principal. Princi
Three elements required for apparent authority
1. Principal's words or actions lead others to believe the agent has authority.