BU231 Lecture Notes - Lecture 12: Franchising, Financial Transaction, Metlife
Document Summary
A person acting for another person in contractual relations with third parties. The agent acts on behalf of the principal to bring third parties into a contractual relationship with the principal. An employee"s work is often under direction and supervision of employer. An employee often has no ability or very limited ability to bind their employer to a contract. Rights and responsibilities between employer/employee differs from principal/agent. Not all employees are agents and not all agents are employees. Agent: a person that has the ability to bind a person in a contract. Example: lawyers (they are doing it on behalf of a client) Partners in a partnership are always agents to each other as they have the ability to bind each other into contracts. Corporations are entered into contracts by an agent as they are intangible and cannot sign for themselves. Three-way relationship: principal, agent, third party contractor. Contractual relationship between principal and third party contractor.
