MGMT 3100 Lecture Notes - Lecture 9: Franchising, Independent Business, Fiduciary

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Relationship in which one person is authorized by another to form contracts with third parties on the principal"s behalf: ex: employment. Agent: person acting for another person in contractual relationships with third parties person. Principal: person on whose behalf the agent acts. Dependent agent: an agent who acts exclusively, or mostly, for a single: ex: insurance agent; normally represent only one insurance company. Independent agent: agent who carries on an independent business and acts for a number of principals: ex: lawyers act as agents for their clients in settlement of lawsuits. Commission agent: one who sells on behalf of a principal to third parties and receives compensation through commissions. Corporations can enter into contracts when its officers and employees act as agents on its behalf"s. Each partner in a partnership is an agent of the other partners. Agency agreement: agreement between principal and agent whereby the agent undertakes to act on behalf of the principal.

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