BusLaw11.032 - ACTUAL AUTHORITY Express Authority Authority...

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ACTUAL AUTHORITY Express Authority: Authority declared in clear, direct, and definite terms, orally or in writing. Equal Dignity Rule: If a contract being executed by an agent on the principal’s behalf is written, most states require that the agent’s authority must also be evidenced by a writing; otherwise, the contract executed by the agent is voidable at the principal’s option. The equal dignity rule does not apply when the agent acts in the principal’s presence or when the agent’s act is merely perfunctory . Power of Attorney: A written document, usually notarized, authorizing an agent to act for a principal. Implied Authority: Authority that is conferred by custom , inferred from the position the agent occupies, or inferred as being reasonably necessary to carry out express authority. Ch. 32: Agency: Liability to Third Parties and Termination - No. 1 Clarkson et al.’s Business Law (11th ed.)
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APPARENT AUTHORITY AND EMERGENCY POWERS Apparent Authority: Authority that arises when a principal, by either words or actions, causes a third party to believe that an agent has authority to act, even though the agent has no express or implied authority to act with regard to the particular matter at hand. If the third party changes his or her position in reliance on the principal’s representations regarding the agent’s authority, the principal may be estopped from denying that the agent had authority to act. Apparent authority may arise due to the principal’s conduct over time, or the agent’s possession and apparent ownership or control of the principal’s property . Emergency Powers: When an unforeseen situation demands action to protect or preserve the property and rights of the principal, but the agent is unable to contact the principal, the agent has emergency authority to act on the principal’s behalf. Ch. 32: Agency: Liability to Third Parties and Termination - No. 2 Clarkson et al.’s Business Law (11th ed.)
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RATIFICATION Ratification: A principal’s express or implied affirmation of a previously unauthorized act by a purported agent. In summary: (1) the agent must have acted on behalf of the principal who subsequently ratified the action; (2) the principal must know all material facts ; If the principal ratifies without full knowledge, she can rescind her ratification, but must reimburse the third party for any costs incurred as a result of reasonably relying on the apparent contract. (3)
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This note was uploaded on 05/18/2011 for the course BUSINESS 2041 taught by Professor Miller during the Fall '08 term at DeAnza College.

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BusLaw11.032 - ACTUAL AUTHORITY Express Authority Authority...

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