1. Agency is a relationship where one person (agent) agrees upon behalf of another (principal) to conclude a contract between the principal and some other person. The agent is normally a mere conduit, or connecting link, for concluding such a contract and once that contract is concluded his duties are at an end and he fades, as it were, out of the transaction.

2. Acting in the name of another
a) The agent may contract with the third party as agent for a named principal.
b) Or, he might act without naming the principal ('undisclosed principal'); especially in making commercial contracts.
This is even possible if the agents purports to act on his own behalf (generally!). Unless the contracct is by its express or implied terms confined to the parties to it, the undisclosed principal may both sue and be sued upon it. However, ratification (in the case of an agent's acting without authority) is not possible in this case (see below). If the agent does not disclose that he is acting on someone else's behalf, the third party may sue both the principal and the agent. Election to sue one extinguishes the claim against the other.

3. Authority to act one someone's behalf
a) Normally, agency is constituted by the principal giving the agent express directions to act for him.
b) If a person acts as an agent without authority, the results depend:
aa) Where the contract is made on behalf of a named principal, or by a person acting 'as agent', the principal may ratify the contract; not so in the case of an 'undisclosed principal'.
bb) If the principal has led other people to believe that someone is his agent, he will be liable for his acts. In these cases, agency cannot be terminated by merely telling the agent to stop. This is due to the principle of 'holding-out'; the principal is 'estopped' to withdraw. It applies especially to companies, corporations, husband- wife affairs, etc. This applies only if the third party did not know and had no reasonable way of knowing that the agent had no authority.
cc) If neither 'holding out' applies nor ratification is made, liability is as follows:
(1) If the principal is not at fault, he will not be liable.
(2) The agent may be liable in contract under the doctrine of 'warranty of authority' (a type of collateral warranty): everyone who purports to act as an agent may be held liable to the other contracting party upon an implied warranty of authority however innocent he may be, if he has not authority. The agent will be liable in tort if he knew that he had no authority, and that he could get none, for fraud.

4. Duties of the agent
a) The agent must not make a profit from the position he occupies (although he is entitled to receive a commission). If he does so, the principal has an action for money had and received, or even an action for fraud.
b) Once one has undertaken to act as an agent, he must continue to do so; he is not allowed to alter his position and step into the shoes of the other contracting party.
c) The agent may not delegate his duties to another person without the principal's consent (confidential position).