Can an employee bind a company by contract?
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Can an employee bind a company by contract?
Under the law of agency, an Agent (employee) is able to bind the Principal (company) in a contractual relationship with a third party (customer or vendor). Under Apparent Authority, if it appears that the employee has authority then their actions bind the company.
What is the significance of the apparent authority principle?
Apparent authority is the power of an agent to act on behalf of a principal, even though not expressly or impliedly granted. “The doctrine protects innocent third persons who have reasonably relied to their detriment upon the representations of those whom the principal holds out as possessing authority to act for him.”
What is an example of apparent authority?
Apparent authority is often called ostensible authority, particularly in the case of directors and officers of a company. An office manager, for example, is not a managing director of a company but it could be seen as a given that they have apparent authority to book tradesmen to work on company property.
How does actual authority arise?
From the above passage, it is clear that actual authority depends upon the agreement between the principal and the agent, whereas apparent authority depends upon the representation made by the principal to the third party. Lord Denning regards apparent authority as power of an agent as represented to others.
How does implied authority arise?
When a real estate agent signs a binder with a client, that agent is given implied authority to act on behalf of the seller. Express authority occurs when an agent is working on behalf of his or her company to act on behalf of a principal.
What is an example of implied authority?
Another example of implied authority is an employee who bears a name tag or a business card with a company logo. This person has implied authority. Potential clients or customers are going to assume that employee has the authority to act on behalf of the company, and they do.
What is it called when an individual owns and controls another person?
Slavery refers to a condition in which individuals are owned by others, who control where they live and at what they work. Slavery had previously existed throughout history, in many times and most places. The ancient Greeks, the Romans, Incas and Aztecs all had slaves.
