LAW 603 Study Guide - Midterm Guide: Financial Statement, Limited Liability Partnership, Legal Personality

• School: Ryerson University
• Department: Law and Business
• Course: LAW 603
• Professor: Gil Lan

Document Summary

Chapter 20 agency and other methods of business. Agent: person who acts on behalf of someone else for a specific purpose. Principal: person whom agent represents for some specific purpose. Agency: the legal relationship between a principal and an agent. Actual authority: exists when the principal authorizes the agent to act on its behalf: granted verbally, granted in employment contract. Apparent authority: exists when the principal creates the reasonable impression that the agent is authorized to act o(cid:374) the pri(cid:374)(cid:272)ipal"s (cid:271)ehalf (spiro v. lintern pg. 520) apparent authority depends on whether it was reasonable for the third party to believe the agent had the authority. A third party cannot enforce a contract if they knew that the agent did not have authority. Principal must have been identified by the agent. Principal must have had the legal capacity to enter the contract both at the time of creation and ratification.