Study guide for exam 3

agency -relationship that exists between a person identified as a principal and another by virtue of which the latter may make contracts with third persons on behalf of the principal. (Parties—principal, agent, third person) agent- person or firm who is authorized by the principal or by operation of law to make contracts with third persons on behalf of the principal. apparent authority- appearance of authority created by the principal’ words or conduct. attorney in fact -agent authorized to act for another under a power of attorney. customary authority- authority of an agent to do any act that, according to the custom of the community, usually accompanies the transaction for which the agent is authorized to act. express authorization- authorization of an agent to perform a certain act. general agent -agent authorized by the principal to transact all affairs in connection with a particular type of business or trade or to transact all business at a certain place. incidental authority- authority of an agent that is reasonably necessary to execute express authority. independent contractor- contractor who undertakes to perform a specified task according to the terms of a contract but over whom the other contracting party has no control except as provided for by the contract. interest in the authority- form of agency in which an agent has been given or paid for the right to exercise authority. interest in the subject matter- form of agency in which an agent is given an interest in the property with which that agent is dealing. power of attorney- written authorization to an agent by the principal. principal -person or firm who employs an agent; person who, with respect to a surety, is primarily liable to the third person or creditor; property held in trust. special agent- agent authorized to transact a specific transaction or to do a specific act. universal agent- agent authorized by the principal to do all acts that can lawfully be delegated to a