Agent for undisclosed or partially disclosed

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Agent for undisclosed or partially disclosed principal : An agent need not inform the person with whom he is negotiating that he is acting on behalf of a principal. The secret principal is usually called an “undisclosed principal.” o Or the agent may tell the other person that he is acting as an agent but not disclose the principal’s name, in which event the principal is “partially disclosed.” Lack of authority in agent : An agent who purports to make a contract on behalf of a principal, but who in fact has no authority to do so, is liable to the other party. Agent acting on own accord : An agent will be liable on contracts made in a personal capacity. Termination of agency : The agency relationship can terminate either by action of the parties or by law. By act of parties : The agency agreement may be terminated either expressly or implicitly. o Express termination : Many agreements contain specified circumstances whose occurrence signals the end of the agency (expiration of a fixed period of time). An agreement may also terminate on the accomplishment of a specified act or following a specific event. Mutual consent between the parties will end the agency. Moreover, the principal may revoke the agency or the agent may renounce it; such a revocation or renunciation of agency would be an express termination. o Implied termination : There are a number of other circumstances that will spell the end of the relationship by implication.
BUSINESS LAW © 2017 FlatWorld 8 Unspecified events or changes in business conditions or the value of the subject matter of the agency might lead to a reasonable inference that the agency should be terminated or suspended. Other circumstances that end the agency include disloyalty of the agent, bankruptcy of the agent or of the principal, the outbreak of war, and a change in the law that makes a continued carrying out of the task illegal or seriously interferes with it. By operation of law : The law voids agencies under certain circumstances: o The most frequent termination by operation of law is the death of a principal or an agent. o The death of an agent also terminates the authority of subagents he has appointed, unless the principal has expressly consented to the continuing validity of their appointment. o Similarly, if the agent or principal loses capacity to enter into an agency relationship, it is suspended or terminated. o The agency terminates if its purpose becomes illegal. o Even though authority has terminated, whether by action of the parties or operation of law, the principal may still be subject to liability. Apparent authority in many instances will still exist; this is called lingering authority . Key Takeaway A person is always liable for her own torts, so an agent who commits a tort is liable; if the tort was in the scope of employment the principal is liable too. Unless the principal put the agent up to committing the tort, the agent will have to reimburse the principal. An agent is not generally liable for contracts made; the principal is liable. But the agent will be liable if he is undisclosed or partially disclosed, if the agent lacks authority or exceeds it, or, of course, if the agent entered into the contract in a personal capacity.

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