Business, Legal & Accounting Glossary
The liability of a principal for all contracts entered into on his behalf by an agent acting within his apparent or ostensible authority is universally recognised.
The concept of agency by estoppel arises where one person acts in such a way that the other believes that a third person is authorised to act on his behalf and enters into a transaction with the third person, the person whose act induced him to do so, is liable for that agreement as if the third person acted on his behalf.
A Legally binding agency relationship that may arise where, in fact, no formal agency agreement is in effect. A principal may give an appearance of an agency relationship by, for example, furnishing his or her firm’s call cards or other stationery to the agent. In such cases, the existence of an agency may be presumed, and the principal may be bound by the acts of the agent performed on the principal’s behalf. Also sometimes referred to as presumption of agency.
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This glossary post was last updated: 22nd November, 2021 | 4,725 Views.