Agent may bind principal by contract, sec 96.

Sec 96

The power of agents to bind their principals by contract is discussed at large in another work, where the authorities are grouped and criticised. To now go over the same ground would not only unduly swell the present treatise, but would be virtually to reprint a large part of a volume with which this is intended to stand side by side. It is enough now to say, in general, that though in the classical Roman law an agent's power to bind his principal by independent contract was disputed, this power, when rightfully exercised, is now as fully conceded in states retaining the Roman common law as in those accepting the English common law. A principal, it is now also universally held, is chargeable with the representations of his agent when such representations were among the inducements which led to a contract which the principal seeks to enforce. Special authorization is not necessary, in order that the principal should be bound by any particular representations, when such representations are within the general range of the duties with which the agent is charged. A principal, also, is bound by all representations which are part of the res gestae, and by the agent's fraudulent representations made in furtherance of the principal's plan. When an agent ignorantly makes a false statement of which the principal knows the falsity, the principal cannot avail himself of a bargain based on such repre--seutations.1 An agent, also, authorized to sell, may do whatever is necessary to effect a sale, and may sell on credit when this is usual, though this does not necessarily imply a power to pledge or to barter. Unless clothed with real or apparent authority from his principal, he cannot, ordinarily, transfer his principal's title. He is authorized, when representing his principal for the purpose, to collect or receive debts due his principal, to negotiate bills, to transact business abroad, and to take proper steps in maritime affairs involving the principal's interests.

Agents may bind principal by contract.

1 Whart. on Agency, sec 146-176.

In following sections it will be seen that:a principal is liable for his agent's representations when within the agent's range ;1 and this is eminently the case with corporations, who can act only through agents:2 an agent's misrepresentations may avoid a contract :3 an agent may become personally liable on an illegal contract :4 an agent cannot take advantage of his opportunities as agent to prejudice his principal;5 nor can he usually set up illegality against his principal ;6 nor can he hold to a contract obtained by unduly influencing his principal :7 an agent is liable to his principal in account stated and for value due :8 the construction of letters of agency which will best support the good faith of the transaction will be sustained :9 an agent's debt cannot be set off against principal,10 though the principal's may against the agent :11 a principal is liable for his agent's negligence:12 an agent is liable to third parties for his, negligence ;13 and for money he has wrongfully paid over to principal after notice :14 an agent may sue in his own name :15 payment to and by an agent, when the agent is duly authorized, is equivalent to payment to and by principal :19 agency, however, cannot be proved by the agent's declarations.17

1 Infra, sec 269 et seq.

2 Infra, sec 130 et seq.

3 Infra, sec 214.

4 Infra, sec 359.

5 Infra, sec 378, 435.

6 Infra, sec 357.

7 Infra, sec 161.

8 Infra, sec 724, 774.

9 Infra, sec 656.

10 Infra, sec 102. 11Infra, sec 1027. 12 Infra, sec 1052. 13 Infra, sec 1054. 14 Infra, sec 755. 15 Infra, sec 810 a.

16 Infra, sec 992.

17 Infra, sec 278. As to inferences from contract of agency, see infra, sec 709 etseq.