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 legally required to act for the benefit of the other within the scope of the relationship. Requires trust,
Disclosed principal
Most common. Examples: employee wears a name badge, answers the phone with the company name, works on company premises.
Partially disclosed principal
Third party knows an agent represents someone, but not who. Example: a real estate agent representing a client who wants
Undisclosed principal
Identity is hidden entirely. Used when revealing the principal would cause inflated prices, security concerns, or unwant
General agents
Authority to transact ALL of a principal's business of a particular kind or in a particular place. Includes partners, ma
Special agents
Authority for ONE transaction or ONE specific act. Includes realtors, athlete's agents, and employment recruiters.
Authority
The right or permission to act legally on another's behalf.
Actual authority (real authority)
Principal intentionally confers authority on an agent.
Express authority
Given by express agreement, oral or written.
Implied authority
Granted through the principal's CONDUCT, not words.
Apparent authority
Authority a third party REASONABLY BELIEVES an agent has, based on dealings with the principal. The principal is held ac
Ratification
When a disclosed principal adopts or confirms a contract entered into by an agent who lacked authority at the time.