BU231 Lecture : Chapter 17 ReadingNotes.doc
Document Summary
Independent agents not an employee and acts on behalf of several principals or clients. Creation of an agency relationship: parties to the relationship, agent and principal agreement, principal and third party principal possesses, express agreement. Relationship between agent and principal is expressed in the form of an agency. 2 hoping that the proposed principal will later adopt this contract: ratification, is exactly this subsequent adoption of by the principal, need for ratification arises from: Not actually being an agent of the principal. Because an agent has exceeded their limited authority: if a principal does ratify, the effect is establishing the contract with third party retroactively as if the agent had the power all along. Note: a principal need not ratify it expressly, it can do so impliedly by assuming the benefits of a contract. Insuring a building after it burns down! (ii) cannot ratify when the rights of an outsider is affected.
