Legal Environment of Business: Chapter 19

Respondeat Superior

A doctrine under which a principal or an employer is held liable for the wrongful acts committed by agents or employees while acting within the course and scope of their agency or employment.

Partially Disclosed Principal

A principal whose identity is unknown by a third party, but the third party knows that the agent is or may be acting for a principal at the time the agent and the third party form a contract.

Undisclosed Principal

A principal whose identity is unknown by a third person, and the third person has no knowledge that the agent is acting for a principal at the time the agent and the third person form a contract.

Disclosed Principal

A principle whose identity is known to a third party at the time the agent makes a contract with the third party.

Notary Public

A public official authorized to attest to the authenticity of signatures.

Agency

A relationship between two parties in which one party (the agent) agrees to represent or act for the other (the principal).

Equal Dignity Rule

A rule requiring that an agent's authority be in writing if the contract to be made on behalf of the principal must be in writing.

E-agent

A semiautonomous computer program that is capable of executing specific tasks.

Exclusive Agency

An agency in which a principal grants an agent an exclusive territory and does not allow another agent to compete in that territory.

Fiduciary

As a noun, a person having a duty created by his or her undertaking to act primarily for another's benefit in matters connected with the undertaking. As an adjective, a relationship founded on trust and confidence.

Express Authority

Authority expressly given by one party to another. In agency law, an agent has express authority to act for a principal if both parties agree, orally or in writing, that an agency relationship exists in which the agent had the power (authority) to act in the place of, and on behalf of, the principal.

Implied Authority

Authority that is created not by an explicit oral or written agreement but by implication. In agency law, implied authority (of the agent) can be conferred by custom, inferred from the position the agent occupies, or implied by virtue of being reasonably necessary to carry out express authority.

Apparent Authority

Authority that is only apparent, not real. An agent's apparent authority arises when the principal causes a third party to believe that the agent has authority, even though she or he does not.

Power of Attorney

Authorization for another to act as one's agent or attorney in either specified circumstances (special) or in all situations (general).

Vicarious Liability

Indirect liability imposed on a supervisory party (such as an employer) for the actions of a subordinate (such as an employee) because of the relationship between the two parties.

Independent Contractor

One who works for, and receives payment from, an employer but whose working conditions and methods are not controlled by the employer. An independent contractor is not an employee but may be an agent.

Ratification

The act of accepting and giving legal force to an obligation that previously was not enforceable.