In civil law circumstances, company” describes situations the place one person, the principal, authorizes a second person, the agent, to cope with a third person on the principal’s behalf. If the agent has acted throughout the scope of the particular authority given, the principal must indemnify the agent for funds made throughout the course of the relationship whether the expenditure was expressly licensed or merely essential in promoting the principal’s business.
In the case of Watteau v Fenwick , 6 Lord Coleridge CJ on the Queen’s Bench concurred with an opinion by Wills J that a 3rd occasion might maintain personally liable a principal who he didn’t find out about when he bought cigars to an agent that was appearing outdoors of its authority.
Usually he must rely upon the fact that the agent holds a sure position, comparable to wife, associate, or worker, within the belief that the traditional incidents of authority implied by such a position are present, even though special restrictions on the agent’s authority might have been made.
Within the case of a real authority, power and privilege to exert the power are coextensive as against the principal, while, within the case of obvious authority, the agent has only the external legal power to perform without the corresponding inner justification vis-à-vis the principal.
The regulation of company is an space of economic law coping with a set of contractual, quasi-contractual and non-contractual fiduciary relationships that contain an individual, called the agent, that is licensed to act on behalf of another (called the principal) to create legal relations with a 3rd get together.