Management and Organizational Studies 2275A/B Chapter Notes - Chapter 13: Secret Profit, Fiduciary, Apparent Authority

• School: Western University
• Department: Management and Organizational Studies
• Course: Management and Organizational Studies 2275A/B
• Professor: Philip King

Document Summary

Agency is the relationship between two persons that permits one person, the agent, to affect the legal relationships of another, known in law as the principal. These legal relationships are as binding on the principal as if that person had directly entered them herself. Agent: a person who is authorized to act on behalf of another. Principal: a person who has permitted another to act on her behalf. In almost every business transaction, at least one of the parties is acting as an agent. The agency relationship which formally recognizes the delegation of authority from one party to another- is a cornerstone of business activity. It is a relationship that makes it possible for businesses to conduct a wide array of transactions. The law governing the relationship where one party, the agent, acts on behalf of another, the principal: this is derived largely from tort and contract law.