Agency: legal relationship b/w principal and agent.
In provinces where the statute of frauds is still in force, the contract must be in writing of the
relationship is to last longer than 1 year. (pg 501)
Actual authority: can be granted less formally, orally, or even appointing an agent to a particular
position such as sales manager.
Apparent authority: Authority can be created when it gives third party the impression the agent is acting
on behalf of the principal. A contract created by an agent within its apparent authority is just as
enforceable as if the agent had actual authority.
Matter of law, for ex, partnership law, each partner is an agent of the partnership and can bind
partnership to obligations that arise in connection with carrying on the business of the partnership in
the usual way.
Ratified: someone accepts contract that was negotiated on their behalf but without their authority.
Ratification to be effective requirements:
1)it must be clear, express or implied from behaviour. If u took the delivery and used the product.
2)must occur within a reasonable time. Cant ratify it after the building burned down for example.
3)principal must accept the whole contract or none of it.
4)the principal must have been identified by the agent
5)the principal must have legal capacity to enter into contract. Both at the time of contract and time of
The agent acquires actual authority; the principal is bound by an obligation that the agent creates within
the scope of that authority. That is true whether or not the third party knows the exact scope of the
agent’s actual authority.
When the principals actions create the reasonable impression that the agent is authorized, that gives
the agent apparent authority. The principal is liable to the th