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Unformatted text preview: Agency by Ratification A situation in which a person or company inaccurately claims to be an agent for another person or company and conducts some act in that capacity, but which the principal (who is not actually a principal) later accepts and recognizes. Because the agent is not actually an agent, any act he/she conducts on behalf of the principal ordinarily would be invalid; however, agency by ratification exists because the "principal" confirmed the act. Agency by estoppels- an agency that is not created as an actual agency by a principal and an agent but that is imposed by law when a principal acts in such a way as to lead a third party to reasonably believe that another is the principal's agent and the third party is injured by relying on and acting in accordance with that belief. A principal has a duty to correct a third party's mistaken belief in an agent's authority to act on the principal's behalf. If the principal could have corrected the misunderstanding but failed to do so, he or the principal's behalf....
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This note was uploaded on 01/24/2012 for the course ECON 101 taught by Professor Newman during the Spring '11 term at Mt. SAC.
- Spring '11