AFM231 Lecture Notes - Lecture 13: Fiduciary, Apparent Authority, Law Of Agency

• School: University of Waterloo
• Department: Accounting & Financial Management
• Course: AFM231
• Professor: Darren Charters

Document Summary

Principal & agent liability, tort liability: employment law. Independent contractor or employee: hiring process, agency the common law understand of what actually allows business to conduct activity. What is the law that underpins the ability of an employee to bind the company when they sign a contract. Agency rel"p: agency is the legal foundation for how organizations are able to act (along with related liability for how they act) Principal/agent and third party: agency based on agreement. Terminology used is actual authority: there are two relationships. In the contract only certain employees will be given agency authority which means that they can sign contracts of up to a certain amount. Actual authority is what they are allowed to do example sign contracts of up to k: there is apparent authority and actual authority. Legal duties of principal are limited but do exist. Reimburse agent for expenses and indemnify for losses. Above assumes framework of actual authority already established.