Principal either by act or by agreement ratifies

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Principal either by act or by agreement ratifies conduct of a person who is not in fact an  agent. Agency by Estoppel Principal causes a third person to believe that another person is the Principal’s Agent,  and the third person acts to her detriment in reasonable reliance on that belief. Agency by Operation of Law Based on social duty is formed in certain situations when the Agent is unable to contact  the Principal. Necessaries. Emergencies. Duties of Agent and Principal Actual  Authority:  express or implied. Apparent  Authority:  estoppel, emergency and ratification. Actual Authority (Express): Can be oral or written. Equal Dignity Rule :  if law requires written contract, agent’s authority must be in writing,  or contract voidable.   Exceptions: Executive Officer acting for Corporation.
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Agent acts in Principal’s presence Power of Attorney (POA) gives agent express authority. POA is a written document and usually notarized. Special POA: specified acts only. General POA: all business for principal. Terminates on principal’s death or incapacity. Actual Authority (Implied). Agent has implied power to do what is reasonably necessary to carry out express  authority.  Inferred or conferred by custom, or agent’s position Test is whether agent reasonably believed she had authority to do the act Apparent Authority. Arises based on what principal causes a THIRD party (not agent) to believe.  Agent has apparent authority when principal, by either word or act, causes 3rd party to  reasonably believe that Agent has authority to act for Principal.    Apparent authority usually comes into existence through a principal’s pattern of conduct  over a period of time. If 3rd party changes legal position by relying on principal’s representations, principal is  estopped  (prevented) from denying agent had authority to contract. Ratification. Occurs when principal accepts responsibility for an agent’s unauthorized act (express or  implied). Requirements: 1. Agent must act on behalf of  Principal. 2. Principal must affirm entire deal.  3. Principal must affirm before 3rd party withdraws from transaction.  4. Principal and 3rd party must have legal capacity to contract when Agent made the  deal. 5. Principals must know all the material facts involved in the transaction. Agent Liability
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Liability for Contracts Principals are classified as: Disclosed:  identity known to 3 rd  party Partially Disclosed:  3 rd  party knows he is dealing with an agent, but doesn’t know  principal’s indentity Undisclosed:  3 rd  party doesn’t know he is dealing with an agent, and the principal’s  identity is totally unknown  Authorized Acts
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