BACHELOR OF BUSINESS ADMINISTRATION

Detailed explanation-1: -Contractual Liability: It is very common for a principle to give legal authority to an agent to act on his behalf when dealing with a third party. An agent may enter into a contract with a third party and the principle will be obligated or bound by those contracts to the third party.

Detailed explanation-2: -The termination of an agency terminates the agent’s express authority, but not his implied authority. The principal’s death automatically terminates an agent’s apparent authority.

Detailed explanation-3: -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.

Detailed explanation-4: -An agent is not liable for any contracts he or she makes with authority on behalf of a fully disclosed principal. Therefore, if a third party knows the existence and identity of the principal, then all legal liability lies with the principal. The only exception to this is when an agent exceeds his or her authority.