Biz Orgs

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stac8199
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49738
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Biz Orgs
Updated:
2010-11-16 00:49:03
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biz orgs
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Exam study
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  1. how is an agency relationship created?
    one person (agent) consents to act on behalf and subject to the control of another (principal)
  2. what type of relationship is agency?
    fiduciary
  3. how does agency relationship arise?
    upon principal's manifestation of assent to A that agent shall (1) act on P's behalf, and (2) subject to P's controle and A manifests assent or otherwise consents to so act
  4. 5 common law duties that P owes A
    • 1. pay compensation for services when reasonably expected
    • 2. reimburse reasonably incurred expensee in the course of agency
    • 3. idemnify for losses/liabilities resulting from authorized, good faith performance of the agency
    • 4. act with due care toward A
    • 5. good faith and fair dealing
  5. 4 broad duties that A owes P
    • 1. good conduct and obedience
    • 2. indemnify P for loss caused by misconduct
    • 3. duty to account
    • 4. duty of loyalty
  6. EE acts w/in the scope of his employment when
    performing work assigned by the ER or engaging in a course of conduct that is subject to the ER's control, and is to serve any purpose of the ER
  7. 5 ways an A can bind P
    • 1. actual authority
    • 2. apparent authority
    • 3. estoppel
    • 4. inherent power
    • 5. ratification
  8. creation of actual authority involves
    • 1. objective manifestation by the P
    • 2. A's reasonable interpretation of that manifestation
    • 3. A belief that it is authorized to act for the P

    *requires that the A belief be objectively reasonable and that the A subjectively hold that belief*
  9. 2 types of actual authority
    1. express --> grant of authority from P to A

    2. implied --> viewed from perspective of A; whether it was reasonable for the A to believe that he had authority based on express and circumstances
  10. apparent authority
    viewed from 3rd party perspective

    act/failure to act by which it was reasonable for 3rd party to believe that P granted A authority to enter in K (manifestation)

    exists only when there is some connection b/t the 3rd party and P

    must always look at how 3rd party learned of the A's alleged authority and ask whether the p reasonably can be said to ahve been the source of that knowledge
  11. inherent authority
    catch all...undisclosed P&A exceeding authority

    General grant of authority for particular kind of customary position and authority to act goes with that (i.e. – security guard)

    used to impose liability on P when there is neither authority nor apparent authority

    Also imposes liability on A

    designed to protect third parties
  12. agency
    one person working with another with certain powers
  13. partnership
    when 2 equals come together

    General, limited, LLP, LLC
  14. authority v. power
    1. A may bind the P even when the A lacks any form of authority

    2. A's power to bind the P is broader than an A's authority to bind the P

    3. authority means that the agent has legitimate power to do so...power is just doing it
  15. implied authority
    is actual authority circumstantially proven which the P actually intended the A to possess and includes such powers as are practically necessary to carry out the duties actually delegated

    often highly contextual...often depending on prior practices or industry customs

    includes authority to do those things that usually accompany or are reasonably necessary to the actions authorized
  16. 2 types of implied authority
    1. implied actual - act of putting an A in such a position leads A to reasonably believe he has authority

    2. implied apparent - act of putting A in such a position that leads 3rd party to reasonably believe agent has authority
  17. "consent to control" plays major role in 4 parts of agency law
    • 1. establishment of an agency relationship
    • 2. control as an element of "servant" status (EE v. IC)
    • 3. control as a consequence (once relationship exists the P has authority to control every detail of the A performance)
    • 4. control as a substitute method for establishing agency status (creditor/debtor)
  18. A must manifest a recognition that serving the...
    P's interest is the primary purpose of the relationship
  19. the agency relationship isn't a K therefore it can exist w/o P giving A any consideration and despite any K provisions...
    1. P always has the power to control every detail of the A performance

    2. the A may have certain powers to bind the P

    3. both P and A have the power to end the agency at anytime
  20. major issues b/t the P and the A
    1. under what circumstances does an agency relationship exist?

    2. what duties does the A owe the P?

    3. What duties does the P owe the A?
  21. major issues b/t the P and 3rd parties
    1. If a 3rd party has made a commitment in dealing with an A, under what circumstances can the P enforce the commitment?

    2. If the A possesses certain information, under what circumstances will the law treat the P as if the P possessed that information?

    3. If the A conveys certain information, under what circumstances will the law treat the P as if the P had conveyed that information?

    4. If an A acts or omissions cause tort injuries to a 3rd party, under what circumstances can the 3rd party proceed directly against the P?
  22. major issue b/t A and 3rd parties
    When an agent arranges a commitment b/t the P and 3rd party, under what circumstances may the 3rd party hold the A responsible for the commitment?
  23. must both parties subjectively consent to the agency relationship?
    NO - parties can be A and P even though one of them had no subjective desire to create the legal relationship thus even a reasonable misinterpretation can create an agency relationship
  24. must parties intend to create the agency relationship?
    NO - the legal concept applies and the label attaches regardless of whether the parties had the legal concept in mind and regardless of whether the parties contemplated the consequences of having the label apply
  25. must the parties even be aware that they are creating the legal relationship?
    NO - the legal concept applies and the label attaches regardless of whether the parties had the legal concept in mind and regardless of whether the parties contemplated the consequences of having the label apply
  26. Must the A be promised K-like consideration by the P?
    NO - an although A and P often superimpose K on their relationship, the agency relationship itself isn't a K and therefore can exist even though the P provides no consideration to the agent
  27. What duties does the A owe the P?
    1. duty of loyalty

    2. duty to act w/in authority

    3. Duty to obey instructions

    4. duty of care

    5. duty to provide information
  28. what duties does the P owe the A?
    • 1. duty to indemnify
    • 2. duties in tort (physical harm to the A)
    • 3. K based duties
  29. under what circumstances can P enforce commitment against 3rd parties made by A?
    1. actual authority --> 3rd party is bound in almost all circumstances

    2. apparant authority --> 3rd party bound
  30. if the A possesses certain info, under what circumstances will the law treat the P as if the P possessed that info?
    if an A has actual knowledge of a fact concerning a matter w/in the A's actual authority, the A's knowledge is attributed to the P

    • attribution occurs regardless of actual conveyance to P UNLESS
    • (1) A was acting adversely to the P, and
    • (2) 3rd party claiming the benefit of P's attributed knowledge knew or had reason to know that the A was so acting
  31. if the A conveys certain info to 3rd party, under what circumstances will the law treat the P as if the P had conveyed that information?
    • if an A acting with actual or apparant authority
    • * gives notice to 3rd party, or
    • * makes a statement/promise to 3rd party, or
    • * makes a misrepresentation to 3rd party
    • the info conveyed has same legal effect under K law as if the P had conveyed the info directly
  32. if A acts or omissions cause tort injuries to 3rd party, under what circumstances can the 3rd party proceed directly against the P?
    1. respondeat superior --> servant status and scope of employment

    2. direct duty to a 3rd party and relies on A for the nec performance

    3. misrepresentation by an A or AA

    4. negligence of apparent servants
  33. when an A arranges a commitment b/t the P and 3rd party, under what circumstances may the 3rd party hold the A responsible for the commitment?
    1. P partially disclosed (unidentified P) --> A is almost always liable on the K

    2. undisclosed principle --> A is liable a fortiori (as far as 3rd party knows the K is with the A and no one else)
  34. binding the principal issue
    under the law of agency, did A have the power to bind P thru that act or omission
  35. attribution
    - always X specific

    - whether A had aa to bind P when A did X

    - applied exclusively as of the time that the relevant X occurred
  36. right/power distinction
    to the extent that an A has the right to bind a P, the A automatically has the power to do so

    possible for an A to have power to bind while lacking the right to
  37. if A exceeds it authority, consistent with the right/power distinction, then
    • 1. the A is liable to the P for the wrongful conduct, and
    • 2. the P is nonetheless bound to the 3rd party
  38. interface function (agency)
    tasks or responsibilities thru which the A connects the P with 3rd parties
  39. determining the resaonbleness of the A's interpretation
    • (1) situation of the parties, relations b/t them, business engaged in
    • (2) general usages of business, trades, or employments of the kind to which the authority relates
    • (3) facts of which the A has notice
    • (4) nature of the subject matter
    • (5) formality/informality and the care or lack there of with which an instrument evidencing the authority is drawn
  40. when the P is undisclosed the 3rd party may escape the K entirely if either:
    1. the K so provides; OR

    • 2. special fraud exists:
    • *A frauduently represented that the A wasn't acting for P
    • *T wouldn't have entered K knowing P was a party; and
    • *A or undisclosed P knew or should have known that T wouldn't have made the K with the P
    • misrepresentation of the P's role insufficient by itself
    • mere failure to disclose P's existence is always insufficient
  41. apparant authority exists when
    • 1. one party (apparant P) makes a manifestation, which
    • 2. somehow reaches a T, and
    • 3. which alone or (more often) in the context of other circumstances causes the T to reasonably believe that another party (apparant A) is indeed authorized to act for the apparant principal
  42. apparant authority derives from the appearance of legitimate authority and doctrine exists to protect...
    T who are misled by appearances
  43. can the statements of the apparant agent alone give rise to apparant authority?
    NO generally

    Exception - the aa (1)is actually authorized to act for the P and (2)while actually authorized, accurately describes the extent of the authority

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