TAILIEUCHUNG - Ebook Business law - Text and cases (12th edition): Part 2

(BQ) Part 2 book "Business law" has contents: Creditors’ rights and bankruptcy, agency and employment, business organizations, business organizations, property and its protection. | Copyright 2010 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. O ne of the most common, important, and pervasive legal relationships is that of agency. In an agency relationship involving two parties, one of the parties, called the agent, agrees to represent or act for the other, called the principal. The principal has the right to control the agent’s conduct in matters entrusted to the agent. By using agents, a principal can conduct multiple business operations simultaneously in various locations. Thus, for example, contracts that bind the principal can be made at different places with different persons at the same time. A familiar example of an agent is a corporate officer who serves in a representative capacity for the owners of the corporation. In this capacity, the officer has the authority to bind the principal (the corporation) to a contract. In fact, agency law is essential to the existence and operation of a corporate entity because only through its agents SECTION 1 AGENCY RELATIONSHIPS Section 1(1) of the Restatement (Third) of Agency1 defines agency as “the fiduciary relation [that] results from the manifestation of consent by one person to another that the other shall act in his [or her] behalf and subject to his [or her] control, and consent by the other so to act.” In other words, in a principalagent relationship, the parties have agreed that the agent will act on behalf and instead of the principal in negotiating and transacting business with third parties. The term fiduciary is at the heart of agency law. This term can be used both as a noun and as an .

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