Principal-Agent relations

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Principal-Agent relations by Mind Map: Principal-Agent relations

1. Benefits and duties

1.1. Someone to act on your behalf when you cannot

1.2. Someone more knowledgeable to act on your behalf

2. Risks

2.1. Agent may act in own self interest

2.2. Agent may make a bad decisions

2.3. Principal may not know all details

3. How they're formed

3.1. A principal seeks out an agent to act on thier behalf

4. How they're terminated

4.1. Someone does not maintain their half of the agreement

4.2. Principal decides the agent is no longer needed

5. Types of Authority

5.1. Actual Authority

5.1.1. Principal implies actual authority

5.1.2. Principal gives express authority

5.2. Apparent authority

5.2.1. When agent acts within a reasonable to believe correct course of action

6. Liabilities

6.1. Liability of agent to principal

6.2. Liability of principal to agent

6.3. Liability of agent to third party