1. Nature of the relation of agency.

The terms 'agency' and 'agent' have in popular use a number of different meanings1, but in law the word 'agency' is used to connote the relation which exists where one person has an authority or capacity to create legal relations between a person occupying the position of principal and third parties2.

The relation of agency typically arises whenever one person, called the 'agent', has authority3 to act on behalf of another, called the 'principal'4, and consents so to act. Whether that relation exists in any situation depends not on the precise terminology employed by the parties to describe their relationship,

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