Chapter 29

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Author:
ebonyprep
ID:
149640
Filename:
Chapter 29
Updated:
2012-04-23 17:30:32
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Business Law
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Description:
Agency Formation and Termination
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  1. Agent
    allows one person to act on the behalf of another (contract with third party on behalf of the principle)
  2. Agency
    • also called principle-agent relationship
    • the fiduciary relationship consent by one person to another that the other will act on persons behalf and subject to their control and consent by other to do so.
    • Can only be created for lawful purposes
  3. Agency Law
    common law that governs agency (mix of contract and tort law)
  4. Principle
    employs another to act on their behalf (must have contractual capacity not insane)
  5. Principle agent relationship
    employer (principle) hires employee (agent) and gives the AUTHORITY TO ACT AND ENTER INTO CONTRACTS on their behalf
  6. Employer-Employee relationship
    employer hires employee to perform some tasks but the employee has not been authorized to enter into contracts on their behalf
  7. Independent Contractor
    a person/business not employee. Employed by principal to perform a certain task. (doctors, dentist, consultant)
  8. Fiduciary (Types of Agency)
    • 1.) Express Agency
    • 2.) Implied Agency
    • 3.) Agency by Ratification
    • 4.) Apparent Agency
  9. Express Agency
    when principal and agent expressly agree to enter into an agency agreement with each other oral or written
  10. exclusive agency
    principle cannot employ any agent other than the one they are with now
  11. power of attorney
    power agent can sign legal documents for principal
  12. Implied Agency
    not expressed but is implied. can be conferred by industry customs, prior dealings, the agents positions
  13. incidental authority
    when agent takes action w/o instruction of principle b/c of an emergency to protect principles property or rights.
  14. Agency Ratification
    • 1.) a person misrepresented himself or herself as and agent when really not.
    • 2.) the principal still accepts even though not legally bound by principal has to act and comply with agreement.
  15. Apparent Agency
    when principal creates the appearance of an agency when it does not exist (ex: owner of a company refers to someone as an employee when really isn't)
  16. Principal Duties
    • 1.) Duty to Compensate
    • 2.) Duty to Reimburse and to Indemnify
    • 3.) Duty to Cooperate
  17. Duty to Compensate
    principal owes to pay an agreed upon amount to agent
  18. Duty to Reimburse and Indemnification
    • Reimburse within scope of contract.
    • Indemnification-pay back for any misconduct liable by principal (legal costs)
  19. Duty to Cooperate
    assist agent in performance of duties (ex: real estate allow broker to show house)
  20. Agents Duty (Fiduciary Duties)
    • 1.) Duty to Perform
    • 2.) Duty of Notification
    • 3.) Duty of Loyalty
    • 4.) Duty of Obedience
    • 5.) Duty of Accountability
  21. Duty to perform
    perform expressed and implied duties
  22. Duty of notification
    notify important info
  23. Duty of Loyalty
    • Act in best interest of agency
    • ex: cant take client or deal from principle only can do that if principle refuse it first
  24. Duty of Accountability
    • account for funds at all times
    • all profits made during time of agency belong to principle.
  25. Termination
    • 1.) Task is achieved or lapse of time done
    • 2.) Principle notified party
    • 3.) Operation of law
    • 4.) Death
    • 5.) Principle dies (agents duties end)
    • 6.) Insanity
    • 7.) Bankruptcy of principle
    • 8.) War btwn prin and agent countries
    • 9.) Impossibility

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