# Legal Person, Agency, and Contract Binding

## Source Type

Legal doctrine synthesis. Common-law agency principles, contract privity, and
juridical person concepts used in commercial law.

## Domain

Commercial law foundations for representation, liability, and binding promises
between parties.

## Why This Source Matters

Commercial software models "accounts" and "organizations," but courts and
regulators reason about **principals, agents, legal persons, and contractual
obligations**. Agency law explains how organizations act through people and why
commercial identity must bind **liability**, not just login state.

## Key Concepts

- **Legal person**: entity recognized by law as holder of rights and duties;
  includes natural persons and juridical persons (corporations, LLCs, etc.).
- **Juridical person**: organization recognized as legal person distinct from
  members (corporation, association).
- **Principal**: party on whose behalf an agent acts.
- **Agent**: party authorized to act for principal and bind principal within scope.
- **Fiduciary duty**: agent's duty of loyalty and care to principal.
- **Actual authority**: express or implied permission granted to agent.
- **Apparent authority**: third party reasonably believes agent has authority
  based on principal's conduct.
- **Agency by contract**: principal-agent relationship created by agreement
  (employment, power of attorney, brokerage).
- **Contract**: agreement creating enforceable obligations; requires parties with
  capacity.
- **Privity**: doctrine limiting contract rights/obligations to parties to the
  contract (with modern statutory exceptions).
- **Representation**: agent acts **for** principal; principal may be bound by
  authorized acts.
- **Termination**: agency ends by agreement, operation of law (death, bankruptcy),
  or breach.

## Relevant Terminology

| Term | Source meaning |
| --- | --- |
| Principal | Party represented by agent. |
| Agent | Party acting on principal's behalf. |
| Legal person | Rights-bearing entity under law. |
| Juridical person | Non-human legal person (company). |
| Fiduciary | Trust-based duty relationship. |
| Power of attorney | Written agency authorization. |
| Binding | Creating legal obligation on a party. |
| Capacity | Legal ability to enter contracts. |
| Apparent authority | Authority as seen by third parties. |

## Modeling Assumptions

- **Organizations act only through agents** (officers, employees, representatives).
- **Commercial binding requires identifiable parties** with legal capacity.
- **Representation is contractual or statutory**, not merely technical (API token).
- **Principal liability** may attach to unauthorized acts if apparent authority exists.
- **Agency terminates**; commercial systems must model lifecycle and revocation.
- **Natural person ≠ company** even when sole proprietor; legal structure matters
  for liability and contract.

## Identity-Canon Implications

- **Organization** collective actor maps to juridical person when legally recognized.
- **Natural Person** maps to natural-person legal person.
- **Representation Relationship** in canon aligns with agency (acts for).
- **Delegation Relationship** is narrower grant of authority; agency may be broader.
- **Commercial Commitment** (contracts, PO acceptance) binds **Legal Entity** or
  **Organization** actors through **Representation** chains.
- Login **Account** does not create agency; employment or explicit authorization does.
- **Apparent authority** explains why enterprises must govern service accounts and
  admin roles carefully (S05, S10, S11).

## Terminology Conflicts

- **Agent (legal)** vs. **Artificial Agent (canon)**: lawyer's agent ≠ AI agent;
  overlap when AI acts under delegated authority.
- **Principal (legal)** vs. **Authorization Principal**: legal principal vs. Cedar principal.
- **Legal person** vs. **Legal Entity** in canon: legal person includes natural persons.
- **Account holder** vs. **contracting party**: bank account ≠ signatory authority.

## Candidate Canonical Mappings

| Legal concept | Candidate canonical concept |
| --- | --- |
| Natural person (legal) | Natural Person |
| Juridical person | Organization / Legal Entity |
| Principal | Organization or Natural Person (represented party) |
| Agent (human) | Natural Person + Representation Relationship |
| Agent (org acting) | Organization + Representation Relationship |
| Power of attorney | Delegation Relationship + Credential |
| Contract | Commercial Commitment (contract) |
| Apparent authority | Trust Relationship risk + Administration governance |
| Agency termination | Lifecycle State on Representation/Delegation |

## Open Questions

- Should canon add **Legal Person** as umbrella for Natural Person + juridical
  Organization/Legal Entity?
- How should apparent authority risks be represented for service accounts?

## References

- Stimmel Law, Agency – The Basic Law — https://www.stimmel-law.com/en/articles/agency-basic-law
- Contract privity doctrine (common law overview)
- Harvard Law School Forum, FinCEN beneficial ownership and corporate persons