BUS 393 Lecture Notes - Lecture 6: Fiduciary, Apparent Authority, Estoppel

• School: Simon Fraser University
• Department: Business Administration
• Course: BUS 393
• Professor: Richard Yates

Document Summary

Agent: someone who represents another person in dealings with third party in dealings w/third party: employees, independent and dependant contractors. Usually created by contract, can be created gratuitously where agent acts as volunteer. Agency depends on granting of authority to act on behalf of principal. Principal and third party bound in contract when agent has authority to bind principal. Implied/actual authority: authority is implied from surrounding circumstances. Apparent authority/agency by estoppel: principal does something to lead third party to believe agent has authority and third party relies on that representation: principal cannot later deny the apparent authority estopped from denying authority. Ratification: where agent exceeds actual and apparent authority, principal is not bound. If principal likes the deal, he or she can ratify the agreement, making it a binding contract. Agent can"t sue; can only be sued for breach of warranty of authority and/or undisclosed principal: third party can sue agent or undisclosed principal, but bound by choice.