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Without the law of agency, corporations could not function

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Chapter 5 states "...without the law of agency, corporations could not function at all." Share an example not given in the textbook that proves this statement correct.

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Solution Summary

The 324 word solution lists and explains eight types of agency relationships as a way to enhance understanding of the concept of agency.

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The law of agency is a concept that operates in commercial and contract law in which a principal authorizes an agent to act on behalf of the principal. This concept transfers authority from the principal to the agent either expressly or implied.

Examples could include:

1. Because a corporation is an artificial person under the law, there must be an agent to represent the corporation in all business matters. Through the board of directors, the corporation appoints an agent to act. ...

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