Power of Agent to Bind Principal Flashcards
(14 cards)
What is the Power to Bind in relation to agents?
An agent can bind the principal to contracts within their authorized powers but cannot exceed the actual authority granted by the agency relationship.
What is Actual Authority of an agent?
Actual authority arises when a principal explicitly requests an agent to act on their behalf and agrees to be bound by the agent’s actions.
What is the Express Authority of an agent?
Express authority is the power granted to an agent through direct oral or written instructions from the principal.
What is Implied Authority of an agent?
Implied authority allows an agent to do anything necessary to fulfill the principal’s explicit instructions or what the agent reasonably believes the principal expects based on those instructions.
What is Apparent Authority?
Apparent authority exists when a principal’s actions lead a third party to believe that an agent is authorized, even if no direct communication to the agent has occurred.
True or False: A principal is responsible for third-party beliefs about an agent’s authority when these beliefs are unreasonable.
False
What is Estoppel in the context of agency relationships?
A principal can deny an agency relationship if there is no indication from the principal that the purported agent is authorized for the transaction.
What can a third party claim to establish estoppel against denying an agency relationship?
A third party can claim estoppel if the principal caused a belief in its existence through intentional or careless actions or failed to correct a known belief.
What is Inherent Agency Power?
Inherent agency power holds a principal liable if they position an agent in a way that misleads a third party, even without actual or apparent authority.
What is Agency by Ratification?
Ratification allows a principal to grant retroactive authority for his agent’s earlier unauthorized actions.
What must a principal have at the time of ratification to grant authority retroactively?
The requisite contractual capacity to authorize the agent’s actions and knowledge of all material facts concerning the transaction.
How does a principal ratify an act?
By manifesting assent that the act shall affect the principal’s legal relations or through conduct justifiable only on the assumption that the principal consents to be bound.
Fill in the blank: Implied authority allows an agent to do anything necessary to fulfill the principal’s explicit instructions or what the agent reasonably believes the principal _______.
[expects]
Delegation
In general, if the authority given involves the agent using his own judgment, he cannot delegate his responsibilities absent an emergency or explicit agreement of the principal
