Sec. SUBCHAPTER IV-OBLIGATIONS OF AGENTS TO THIRD PERSONS 2761. Warranty of authority. 2762. Agent's responsibility to third persons. 2763. Surrender of property to third person. 2764. Application of chapter on persons. SUBCHAPTER V-DELEGATION OF AGENCY 2781. Agent's delegation of powers. 2782. Unauthorized subagent. 2783. Authorized subagent. SUBCHAPTER VI-TERMINATION OF AGENCY 2801. Termination generally. 2802. Revocation, death, or incapacity of principal. Subchapter I-Definitions § 2661. Agent and agency defined An agent is one who represents another, called the principal, in dealings with third persons. Such a representation is called agency. § 2662. Capacity to appoint or be agent Any person having capacity to contract may appoint an agent, and any person may be an agent. § 2663. General or special agents An agent for a particular act or transaction is called a special agent. All others are general agents. § 2664. Actual or ostensible agency An agency is either actual or ostensible. § 2665. Actual agency defined An agency is actual when the agent is really employed by the principal. § 2666. Ostensible agency defined An agency is ostensible when the principal intentionally, or by want of ordinary care, causes a third person to believe another who is not really employed by him to be his agent. Subchapter II-Authority of Agents § 2691. Scope of authority An agent may be authorized to do any acts which his principal might do, except those to which the latter is bound to give his personal attention. § 2692. Performance of acts required of principal by this title Every act which, according to this title, may be done by or to any person, may be done by or to the agent of that person for that purpose, unless a contrary intention clearly appears. § 2693. Defrauding principal An agent may never have authority, either actual or ostensible, to do an act which is, and is known or suspected by the person with whom he deals to be, a fraud upon the principal. § 2694. Creation of agency An agency may be created, and an authority may be conferred, by a precedent authorization or a subsequent ratification. § 2695. Consideration unnecessary A consideration is not necessary to make an authority, whether precedent or subsequent, binding upon the principal. § 2696. Oral or written authorizations An oral authorization is sufficient for any purpose, except that an authority to enter into a contract required by law to be in writing may be given only by an instrument in writing. § 2697. Ratification of part of transaction Ratification of part of an indivisible transaction is a ratification of the whole. § 2698. Ratification of agent's act A ratification may be made only in the manner that would have been necessary to confer an original authority for the act ratified, or where an oral authorization would suffice, by accepting or retaining the benefit of the act with notice thereof. § 2699. When ratification void A ratification is not valid unless, at the time of ratifying the act done, the principal has power to confer authority for such an act. § 2700. Third persons; effect of ratification An unauthorized act may not be made valid, retroactively, to the prejudice of third persons, without their consent." 2701. Rescission of ratification A ratification may be rescinded only if made without such consent as is required in a contract, or with an imperfect knowledge of the material facts of the transaction ratified. § 2702. Measure of agent's authority An agent has such authority as the principal, actually or ostensibly, confers upon him. § 2703. Actual authority defined Actual authority is such as a principal intentionally confers upon the agent, or intentionally, or by want of ordinary care, allows the agent to believe himself to possess. § 2704. Ostensible authority defined Ostensible authority is such as a principal, intentionally or by want of ordinary care, causes or allows a third person to believe the agent to possess. § 2705. Agent's authority as to persons having notice of restrictions An agent has actually such authority as is defined by this chapter and chapter 77 of this title, unless specially deprived thereof by his principal, and has even then such authority ostensibly, except as to persons who have actual or constructive notice of the restriction upon his authority. § 2706. Necessary authority An agent may: (1) do everything necessary or proper and usual, in the ordinary course of business, for effecting the purpose of his agency; and (2) make a representation respecting any matter of fact, not including the terms of his authority, but upon which his right to use his authority depends, and the truth of which cannot be determined by the use of reasonable diligence on the part of the person to whom the representation is made. § 2707. Power to disobey instructions An agent may disobey instructions in dealing with the subject of the agency, in cases where it is clearly for the interests of his principal that he should do so, and there is not time to communicate with the principal. 8 2708. Authority given in general and specific terms When an authority is given partly in general and partly in specific terms, the general authority gives no higher powers than those specifically mentioned. 8 2709. Exceptions to general authority An authority expressed in general terms, however broad, does not authorize an agent to: (1) act in his own name, unless it is the usual course of business to do so; (2) define the scope of his agency; or (3) do any act which a trustee is forbidden to do by sections 3531-3541 of Title 7. § 2710. Authority to sell personal property An authority to sell personal property includes authority to warrant the title of the principal and the quality and quantity of the property. § 2711. Authority of general agent to receive price A general agent to sell, who is intrusted by the principal with the possession of the thing sold, may receive the price. § 2712. Authority of special agent to receive price A special agent to sell may receive the price on delivery of the thing sold, but not afterwards. Subchapter III-Mutual Obligations of Principals and § 2731. Principal's rights and liabilities from agent's acts An agent represents his principal for all purposes within the scope of his actual or ostensible authority, and all the rights and liabilities which would accrue to the agent from transactions within that limit, if they had been entered into on his own account, accrue to the principal. § 2732. Incomplete execution of authority A principal is bound by an incomplete execution of an authority only when it is consistent with the whole purpose and scope thereof. § 2733. Notice to principal or agent As against a principal, both principal and agent are deemed to have notice of whatever either has notice of, and ought, in good faith and the exercise of ordinary care and diligence, to communicate to the other. § 2734. Obligation of principal when agent exceeds authority When an agent exceeds his authority, his principal is bound by his authorized acts only as far as they can be plainly separated from those which are unauthorized. § 2735. Acts under ostensible authority A principal is bound by acts of his agent, under a merely ostensible authority, to those persons only who have in good faith, and without want of ordinary care, incurred a liability or parted with value, upon the faith thereof. § 2736. Exclusive credit to agent If exclusive credit is given to an agent by the person dealing with him, his principal is exonerated by payment or other satisfaction made by him to his agent in good faith, before receiving notice of the creditor's election to hold him responsible. § 2737. Person dealing with agent without knowledge of agency One who deals with an agent, without knowing or having reason to believe that the agent acts as such in the transaction, may set off against any claim of the principal arising out of the same, all claims which he might have set off against the agent before notice of the agency. § 2738. Instrument intended to bind principal An instrument within the scope of his authority by which an agent intends to bind his principal, does bind him if that intent is plainly inferable from the instrument itself. § 2739. Principal's responsibility for agent's negligence, wrongful act, or omission Unless required by or under the authority of law to employ that particular agent, a principal is responsible to third persons for the negligence of his agent in the transaction of the business of the agency, including wrongful acts committed by the agent in and as a part of the transaction of the business, and for his willful omission to fulfill the obligations of the principal. § 2740. Responsibility for agent's other wrongs A principal is not responsible for wrongs committed by his agent other than those specified by section 2739 of this title, unless he has authorized or ratified them, even though they are committed while the agent is engaged in his service. Subchapter IV-Obligations of Agents to Third Persons 2761. Warranty of authority One who assumes to act as an agent thereby warrants, to all who deal with him in that capacity, that he has the authority which he assumes. § 2762. Agent's responsibility to third persons One who assumes to act as an agent is responsible to third persons as a principal for his acts in the course of his agency only when: (1) with his consent, credit is given to him personally in a transaction; (2) he enters into a written contract in the name of his principal, without believing, in good faith, that he has authority to do so; or (3) his acts are wrongful in their nature. § 2763. Surrender of property to third person If an agent receives anything for the benefit of his principal, to the possession of which another person is entitled, he shall, on demand, surrender, or so much of it as he has under his control at the time of demand, to that person, on being indemnified for any advance which he has made to his principal, in good faith, on account of the same; and is responsible therefor, if, after notice from the owner, he delivers it to his principal. § 2764. Application of chapter on persons The provisions of this subchapter are subject to the provisions of chapter 3 of this title. Subchapter V-Delegation of Agency § 2781. Agent's delegation of powers An agent, unless specially forbidden by his principal to do so, may delegate his powers to another person only when: (1) the act to be done is purely mechanical; (2) it is such as the agent cannot himself, and the subagent can lawfully perform; (3) it is the usage of the place to delegate such powers; or § 2782. Unauthorized subagent If an agent employs a subagent without authority, the former is a principal and the latter his agent, and the principal of the former has no connection with the latter. § 2783. Authorized subagent A subagent, lawfully appointed, represents the principal in like manner with the original agent; and the original agent is not responsible to third persons for the acts of the subagent. Subchapter VI-Termination of Agency § 2801. Termination generally An agency is terminated, as to every person having notice thereof, by: (1) the expiration of its term; (2) the extinction of its subject; (3) the death of the agent; (4) the agent's renunciation of the agency; or (5) the incapacity of the agent to act as such. § 2802. Revocation, death, or incapacity of principal Unless the power of an agent is coupled with an interest in the subject of the agency, it is terminated, as to every person having notice thereof, by: A factor is an agent, as defined by section 2271 of this title. § 2842. Actual authority of factor In addition to the authority of agents in general, a factor has actual authority from his principal, unless specially restricted: (1) to insure property consigned to him uninsured; (2) to sell, on credit, anything intrusted to him for sale, except such things as it is contrary to usage to sell on credit; but not to pledge, mortgage, or barter the same; and (3) to delegate his authority to his partner or servant, but not to a person in an independent employment. § 2843. Ostensible authority A factor has ostensible authority to deal with the property of his principal as his own, in transactions with persons not having notice of the actual ownership. |