AFM231 Chapter 13: Chapter 13 Textbook notes

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This chapter explains the concept of agency and its relevance to business, including formation of the agency relationship, the duties and liabilities of the various parties in the relationship, and ending the relationship. This is important material as it forms the basis of relationships in partnership and corporate law. Since fiduciary duties are very important in agency law, some of this material will already be familiar to you. You are responsible for everything in the chapter, however key concepts to focus on are: Understand the terms agency, agent and principal, and the two figures at pp. Consider why a business would use an agent to act on its behalf when there are considerable risks to the business. Afm 231 chapter 13: the agency relationship. Realize that there are various ways an agency relationship can come into being. In particular, make sure you understand that the agency relationship can come about without the principal intending it.

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