Understanding Agency and Agent's Authority in Business

Agency

Legal relationship allowing one to act for another.

Principal

The person who grants authority to an agent.

Agent

Individual authorized to act on behalf of the principal.

Actual Authority

Directly granted authority by the principal.

Express Actual Authority

Authority explicitly stated in words or writing.

Implied Actual Authority

Authority inferred from conduct or relationship nature.

Toll v Alphapharm

Case confirming agent binds principal within actual authority.

Actual Implied Authority

Authority to perform necessary actions for express instructions.

Apparent Authority

Authority perceived by third parties from principal's conduct.

Freeman & Lockyer v Buckhurst Park Properties

Case establishing liability from apparent authority representation.

Panorama Developments v Fidelis

Case showing company bound by secretary's apparent authority.

Pacific Carriers Ltd v BNP Paribas

Case illustrating authority from misleading principal representations.

Consent

Principal's agreement required for implied authority to exist.

Third Party

Individual relying on agent's authority in transactions.

Liability

Responsibility for actions taken by an agent.

Civil Liability

Legal responsibility for non-criminal acts.

Criminal Liability

Legal responsibility for criminal acts.

Business Practices

Standard actions typical in a specific industry.

Managing Director

Role with implied authority for common managerial tasks.

Representation

Principal's communication leading to third party's belief in authority.

Omissions

Failure to act that can imply authority.

Reasonable Reliance

Third party's justified belief in agent's authority.