Management and Organizational Studies 2275A/B Lecture Notes - Lecture 5: Legal Fiction, Legal Personality, Profit Sharing

• School: Western University
• Department: Management and Organizational Studies
• Course: Management and Organizational Studies 2275A/B
• Professor: Philip King

Document Summary

Law of agency: the law governing the relationship where one party, the agent, acts on behalf of another, the principal. Agency by agreement (contract: most popular in business, agent usually charges principal some fee, not all employees are agents. Concept of authority: actual authority: the powers of an agent that derives from either express or implied agreement. Express authority is the written or oral authority granted by the principal to the agent. Is inferred from the position the agent occupies. Is reasonably necessary to carry out or otherwise implement the agents express authority. Arises by virtue of a well-recognized custom in a particular trade, industry, or profession. As long as an agent is acting within his apparent authority, the principal will be bound by the transaction unless the third party reasonably ought to have known the limitation of that agent.