ABSTRACT
NATURE OF AGENCY An agent has authority to make contracts with third parties on behalf of another person, the principal. Having made the contracts the agent usually drops out of the picture and the contracts take effect between the principal and the third parties. Only an agent with some type of authority to act for the principal has the right to make a contract which binds the principal. (However, in Chapter 4 we saw that a person who is not an agent sometimes has the power, but not the right, to pass a good title to another person’s goods.)
ACTUAL AUTHORITY An agent may be given actual authority either expressly or impliedly. Actual authority arises where the principal and agent agree, expressly or impliedly, that the agent should have authority.
