It is necessary to determine whether MC Electric is 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 in which the principal authorizes an agent to act on his behalf. Furthermore, effective authority can also be granted in a less formal way through an oral delegation of powers by a represented person. 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 principal can confer apparent authority through conversation, but also through official professional titles and positions (if they give the reasonable impression