Introduction

Because agency law is so fundamental to the transaction of business by corporations and all other types of business organizations, this first chapter provides an overview of agency concepts and an introduction to agency law as it relates to business organizations.

CHAPTER GOAL
The goal of this chapter is for students to become familiar with the following terms and topics concerning agency law:

• Agency, agent, and principal, and other basic terms concerning the agency relationship
• Elements of an agency agreement
• Differences between an employee and an independent contractor
• Power-of-attorney purposes
• Agency agreement creation
• Liability of the principal for the acts of the agent
• Agent’s liability to third parties when acting in his or her capacity as an agent
• Agency relationship termination
• The individuals and/or entities that act as principal(s) and agent(s) for each of the various types of business organizations

After reading this chapter in the book, use the Study Support Tools on left side of this page to reinforce the textbook. It is recommended that you use the tools in order from top to bottom.