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  1. Actual Authority
    The power given by a principal to an agent that allows the agent to enter into contracts upon the principal's behalf.
  2. Agent
    A party who works on behalf of another party known as the principal.
  3. Apparent Authority
    When a 3rd party reasonably believes that an agent has actual authroity even though the agent lacks actual authority.
  4. Disclosed principal
    A principal who is known by the third party
  5. Fiduciary Duties
    The obligations that an agent owes to a principal that require the agent to act in the best interests of the principal.
  6. Independent contractor
    A pary who works for another party, but is not subject to the control of the other party; therfore an independent contractor generally does not create liability for the other party.
  7. Joint and several liability
    When a principal and agent can both be held liable by the third party or the third party may choose to sever liability and only hold either the principal or the agent liable.
  8. Partially disclosed principal
    When a 3rd party knows of the existence of the principal, but does not know the principal's identity.
  9. Principal
    The party for whom the agent acts.
  10. Ratification
    When a principal approves of a contract that was entered into by an agent lacking authority. Ratification means that the principal is now liable for the contract.
  11. Respondeat Superior
    Literally means that the superior should be held liable. When an agent commits a tort in the scope of employment, then the principal is liable for the agent's contract.
  12. Scope of employment
    Agent's actions that occur substantially in the work environment.
  13. Third Party
    Term in principal/agent law that applies to a party who is interacting with either the principal or the agent. The principal and agent are the 1st 2 parties.
  14. Undisclosed Principal
    When a third party to a contract does not know that a principal exists.
Card Set:
2012-03-02 05:37:54
Business Law

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