It is necessary to determine whether MC Electric will be required to pay GB the 50% commission on the deal. In determining whether the contract is binding or not, the legal area concerned would be contract law. There are two rules/principles of law that apply to agents like Dortmund and their actions. The first legal principle concerns the question of whether or not Dortmund had the actual authority to conclude an agreement with Great Britain. Actual authority is the authority specifically set forth in an agency contract where the principle authorizes an agent to act on its behalf. Furthermore, effective authority can also be granted less formally through an oral delegation of authority by a principle. Dortmund could only have effective authority if their contract gave them the authority to conclude such a deal with GB. The second legal principle to consider is whether or not Dortmund had apparent authority. Apparent authority exists when the principal creates the impression that the agent is authorized to act on his behalf. A principle can confer apparent authority through conversation, but also through titles and official positions (if they give the reasonable impression that an agent has the authority). Sometimes both apparent and actual authority may exist, but often only one