BACHELOR OF BUSINESS ADMINISTRATION

Detailed explanation-1: -A principal is bound only for such acts of the agent which are within the authority of the agent. If the agent’s act is in excess of the authority, the principal is not liable for the same. Sometimes a part of the act done by the agent may be within the authority and the other part outside it.

Detailed explanation-2: -THIRD PARTIES AND AGENCY If an agent acts within the scope of his/her authority, a principal is bound by the act of his/her agent. Moreover, a principal is responsible for any action or inaction by the principal’s agent.

Detailed explanation-3: -That is, when the agent represents that she has authority to enter into a contract on behalf of the principal, her actions will bind the principal if a reasonable person would believe those representations. The 3rd party’s belief must generally result from some action or inaction by the principal.

Detailed explanation-4: -The principal-agent relationship is an arrangement in which one entity legally appoints another to act on its behalf. 1 In a principal-agent relationship, the agent acts on behalf of the principal and should not have a conflict of interest in carrying out the act.

Detailed explanation-5: -Implied authority refers to an agent with the jurisdiction to perform acts that are reasonably necessary to accomplish the purpose of an organization. Under contract law, implied authority figures have the ability to make a legally binding contract on behalf of another person or company.