Agency relationships and foundational employment law concepts from an intro business law course.
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- What is an agency relationship?
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A fiduciary relationship where one party (agent) acts on behalf of another party (principal) subject to the principal's control.- Define principal in agency law.
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The party who authorizes an agent to act on their behalf and has the right to control the agent's conduct.- Define agent in agency law.
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A party authorized to act on behalf of a principal and subject to the principal's control.- What is express agency?
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An agency created by direct agreement, written or oral, between principal and agent that expressly grants authority to act.- What is implied agency?
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An agency inferred from the principal's conduct and surrounding circumstances, even without an express agreement.- What is apparent agency?
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An agency existing when the principal's words or conduct lead a third party to reasonably believe the agent has authority, even if actual authority is lacking.- What does ratification mean in agency law?
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A principal's affirmation of an unauthorized act performed by an agent, giving retroactive approval and binding the principal to the act.- What is actual authority in agency?
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Authority a principal actually grants to an agent, either expressly or as reasonably necessary to carry out express authority.- What fiduciary duty does an agent owe regarding loyalty?
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The agent must act solely in the principal's interest, avoiding conflicts of interest and not competing with the principal's business.- What fiduciary duty does an agent owe regarding care?
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The agent must perform with the degree of care, skill, and diligence expected of a person in the agent's position.- What fiduciary duty does an agent owe regarding obedience?
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The agent must obey all lawful instructions from the principal within the scope of the agency.- What fiduciary duty does an agent owe regarding disclosure?
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The agent must disclose to the principal all material facts known to the agent that relate to the agency.- What is the principal's duty of compensation?
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The principal must pay the agent agreed compensation for services rendered, or reasonable compensation if the amount is not specified.- What is the principal's duty of indemnification?
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The principal must reimburse the agent for reasonable expenses and losses incurred in performing authorized agency duties.- What is an undisclosed principal?
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A principal whose identity is not known to the third party, with the agent appearing to act on their own behalf.
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