BUS 393 Chapter Notes - Chapter 13: Vicarious Liability, Sole Proprietorship, Limited Liability

• School: Simon Fraser University
• Department: Business Administration
• Course: BUS 393
• Professor: Richard Yates

Document Summary

Introduction: agent represents and acts on behalf of principal in dealings with 3rd parties, agency carries duties/obligations separate from employment relationship. The agency relationship: can be created by express/implied contract, estoppels, ratification, or gratuitously => key element is the granting of authority. Actual authority: can be expressly stated by principal or implied from circumstances, agent who exceeds actual authority may be liable for injury, but principal may still be bound if agent acts within apparent authority. If agent was acting within authority, or the principal did something to lead the third party to believe the agent had authority, there is a contract between the principal and third party. If neither are true, third party must look to agent for redress. If principal ratifies an unauthorized contract created by agent, it is binding. Contract cannot make any reference to a need for ratification, or else it becomes an agreement to enter into an agreement.