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Agency LawLaw of agency requires that an agency relationship be based on consent where an agent consents to act under the direction and control of the principal, and that the agent agrees to act for and on behalf of the principal. The agent is not entitled to gains or expected to carry risks of the enterprise. An agent is authorized to do only what is reasonable for him to infer the principal desires of him in the light of the principals manifestations and the facts as he knows at the time he acts (Rasmusen, 2004). A principal is bound by contracts made by the underExpress authority where there is an explicit agreement with the agent to act in a certain manner.Actual implied authority where the principal has employed an agent in an explicit agreement though not specifically authorized to take a particular action but where the agent can reasonably infer that authority for the particular action has been delegated to him.Apparent authority where the principal has no explicit agreement with the agent but conducts himself in a manner from which a third party could reasonably infer that the agent is authorized.Estoppel where the principal is estopped