BACHELOR OF BUSINESS ADMINISTRATION

Detailed explanation-1: -n Warranty of the Principal’s Capacity-a warranty imposed by law on the agent so that if the principal injured the third party, the third party could recover from the agent.

Detailed explanation-2: -A contract to be made by an agent on behalf of a principal is considered to be the contract of the principal and not that of the agent. It allows the principal to authorize somebody to carry out her duties, either for a specific purpose (i.e., purchasing a house) or generally (i.e., to conduct many transactions).

Detailed explanation-3: -Agency by Ratification A principal may subsequently ratify an act done by a person who acted on his behalf without his permission or knowledge. If the act is ratified, a relationship of the agency will come into existence and it will be as if he had previously authorized the person to act his agent.

Detailed explanation-4: -Breach of warranty of authority is an action available against an agent who misrepresents his or her authority to a third party and as a result of that misrepresentation, the third party enters into a contract and suffers loss.

Detailed explanation-5: -Principal Liable for Agent’s Misconduct When an agent commits a wrong or tort or fraud while acting within his actual or ostensible authority, the principal is liable for his acts. An agent is also personally liable in this case and can be sued also.