Management and Organizational Studies 2275A/B Lecture Notes - Lecture 13: Uberrima Fides, Secret Profit, Insurance Broker

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

Document Summary

Agency: a relationship that exists when one party (the agent) represents another party in the formation of legal relations (the principal) Agent: person who is authorized to act on behalf of another. Principal: person who has permitted another to act on her behalf. These legal relationships are as binding on the principal as if that person had directly entered it themselves. Kind of relationship is essential to the success of the principal, who may not necessarily have the expertise to handle the given matter. It is a relationship that makes it possible for businesses to conduct a wide array of transactions. Agents simply represent principals in transactions with others. Two key relationships at play in an agency situation: 1) relationship between agent and principal. What are a"s obligations: 2) outsider-principal relationship outsider: party with whom the agent does business on behalf of the principal (sometimes called 3rd party)