93. Introduction. In the subject just completed, was included a general consideration of the nature, requisites, validity, interpretation, operation and enforcement of contracts, oral and written, and the persons or classes of persons, natural or artificial, having contractual powers and capable of assuming contractual duties, but without special reference to particular classes of contracts or in respect to particular kinds of property. The chief aim was to firmly fix the fundamental principles which underlie

all contractual relations, the special application being left for subsequent classification and treatment.

94. Necessity. The needs and the magnitude of business are such that the business man cannot personally supervise and make all the agreements and obligations necessary to conduct a large and widely scattered business. Consequently, he appoints others called agents to do his bidding.

95. Definition. An agent is one vested with authority to bring about a contractual relationship between his principal and a third person. The idea of agency necessitates the relationship of three parties: the principal who gives authority, the agent who accepts and acts under and through this authority, and the third person whose willingness to do business with the agent brings about a contract which, while made with the agent, binds the third party and the principal. The authority of the agent may be delegated by the principal or by operation of law. The authority for performance may be given subsequently to the act. Subsequent ratification is equivalent to prior authority when it confirms a demand against the one ratifying.

96. Nature of Contract. The law of agency rests on the maxims "He who acts through another acts in person" and "He who has authority to act has power to appoint another to act in his stead."

The fundamental elements of contracts form the foundation of agency. The contract formed by the agent must submit to the same analysis as though made by the principal. Agency is a means to an end. The agency is the instrument through which the various details of business are consummated.

97. Who May Act. We will deal first with the competency of the principal, and second with the ability of the agent to intelligently follow the instructions of the principal. No principal can enter into a contract through an agent that he himself could not make. An agent need not be competent to make a

binding contract for himself, but must be sufficiently intelligent to form contracts in accordance with the powers delegated to him by his principal. A minor, while not being able to make a personal contract, may be competent to make contracts for another.

98. Distinction Between Agent and Servant. Not all who act for another are to be classed as agents. The chief distinction between an agent and a servant is in the nature of the act performed. The agent brings about a relationship between his principal and a third person that results in a contract, while the servant has no such rights or powers conferred on him. One makes a contract, the other performs some act. One person may be both a servant and an agent. A captain of a vessel as such is a servant, but coupled with this appointment is authority to hire a crew or pledge for credit. He would be an agent while performing the latter.

99. Classes of Agents. While authors generally classify agents as general and special, there is practically nothing to be gained by this classification, as in each case the authority must come from the principal either by delegation or by operation of law. In each case the agent is bound to follow instructions and to be loyal to the interests of his principal. The third party is bound to take notice of the authority vested in the agent to limit either his authority or the scope of work to be performed; neither does it make him a general agent to give him full discretion in bringing about the desired end. A person who consummates contractual relationship between a principal and a third party is an agent pure and simple. "No man is at liberty to send another into the market to buy and sell for him, as his agent, with secret instructions as to the manner in which he shall execute his agency which are not to be communicated to those with whom he is to deal; and then, when his agent has deviated from these instructions, say that he was a special agent, that the instructions were limitations upon his authority, and that those with whom he dealt, in the matter of his agency, acted at their peril because they were bound to inquire, where inquiry would have been fruit

less, and to ascertain that of which they were not to have knowledge.” “The rule is, that if a special agent exercise the power exhibited to the public, the principal will be bound even if the agent has received private instructions which limit his special authority." The doctrine as above quoted recognizes no such classification as special and general agents. If the third party has acted in good faith and has exercised reasonable dilligence in determining the agent's authority, and an agency does exist, the principal is bound.

100. Formation of Contract. The formation of the contract rests on the mutuality of the parties bound. The agreement implies an offer and an acceptance. The elements of parties, subject matter, consideration, agreement, time, and form need no discussion at this time or place. They have been fully discussed under the subject of contract. Our aim and investigation will bear entirely on the new element introduced-the agent-and the new relationship thereby raised.

1. By Agreement. The greater number of agents are appointed as the result of an agreement between two persons, whereby one agrees to appoint and the other to accept such appointment and act for the other.

2. By Implication. If the party acting or holding himself out as the agent of another transacts business for the supposed principal in such a way that the public is led to believe an agency exists, and the principal knows this to be so, the law implies an agency to exist. This is for the protection of the public. If such conditions exist with the knowledge of the principal and he does not wish to be bound, it is his duty to object and thereby prevent third parties from entering into the agreement. If, however, the supposed principal has no knowledge of the representation and in no way lends aid, there is no liability on his part. There must be knowledge of the representation or a careless indifference that deters him from such examination as a man of ordinary forethought would make, in order to render one liable as principal.

3. Authority. The right to appoint an agent to perform for one depends upon the power to form a contract. Where individual authority to make a contract exists there also is found appointing power. The principal must possess contractual ability; the agent, the ability to faithfully follow instructions.

4. Ratification. If the representation of agency is made when in fact no agency exists, and contractual relationship is made with a third party, the agreement may be ratified by the principal and the benefits of the contract will inure to the profit of the principal, a subsequent ratification being equivalent to the giving of prior authority. The weight of authority is that such ratification does not bind the third party. He has a right to object to the contract, as he has a right to do business with one having authority. The ratification of the principal irrevocably binds him, and the contract is complete unless the third party refuses to be bound.

By the acceptance of a contract made by an agent where he has exceeded his authority, the agent's power to bind the principal is enlarged. The agent may not have the right to act, but he frequently has the power to act and bind the principal.

The agent is bound to follow instructions, but if he exceeds his authority and the principal ratifies the act, the agent's power to act is thereby enlarged so far as the third party is concerned. A appoints B to buy grain for him, giving him the usual authority to do so. A buys and ships grain and B is generally recognized as A's agent. A instructs B not to buy wheat during certain months. B nevertheless buys wheat. A is bound, as the third party has no knowledge of the instructions. Again the party knows of the instructions to the agent, notwithstanding he sells wheat to A through his agent, B, which contract is ratified by the principal. Other similar contracts may now be made with the agent and be enforced, although the agent has no right to make the contract.

101. Delegating Authority. As a general rule an agent is appointed to do a particular act or acts, generally relating to a cer