Law of agency

The body of law governing relationships in which an agent acts on behalf of a principal, defining the agent’s authority and the parties’ duties and liabilities.

Actual authority: Authority an agent reasonably understands the principal has granted through words or conduct. It determines which acts bind the principal because of the principal’s own communications.
Fiduciary duty: A duty of loyalty and care imposed on a person entrusted to act for another. An agent’s fiduciary obligations are central to the principal-agent relationship.
Real estate agency: The legal relationship in which a real estate professional represents a buyer, seller, landlord, or tenant. Disclosure, loyalty, and authority rules shape transactions handled by real estate agents.
Contract law: The body of law governing agreements and the obligations they create. Agency often determines whose conduct and assent create contractual obligations.
Apparent authority: Authority arising when a principal’s manifestations reasonably lead a third party to believe an agent can act. It can bind a principal even when the agent lacks actual authority.
Duty of loyalty: A fiduciary’s obligation to act for the beneficiary’s interests rather than pursue conflicting personal interests. It bars agents from secretly profiting from agency work or acting adversely to the principal.
Commercial agent: A person authorized to negotiate or conclude commercial transactions for a business principal. Commercial intermediaries put authority and principal liability rules into practice.
Trust law: The body of law governing property held by a trustee for beneficiaries. Both relationships impose fiduciary duties, but trustees hold and administer trust property.
Ratification: A principal’s adoption of an act initially performed without authority, with knowledge of its material facts. It can validate an unauthorized act after the agent has performed it.
Duty of care: An obligation to exercise the care and competence required by the circumstances or governing law. It governs how carefully an agent must carry out assigned tasks.

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