Law 3220 Chapter 14

You post a notice at school that you will sell your laptop computer for $600. A buyer comes by your room to look at it while you are gone and your roommate sells it for $500, thinking you would be happy with that price, which you did not authorize.

you can accept the deal by express or implied ratification

Agency by estoppel means:

actions by the principal lead a person to believe that the presumed agent has authority to act on the principal's behalf

The authority given by the principal to agent, conferring on the agent the power and right to change the principal's legal status

actual authority

The agent's ability to transact business on behalf of and for the principal depends on whether the agent possesses:

actual or apparent authority

When you go on vacation you give your neighbor authority to pick up your mail and watch for burglars for you. You tell the neighbor not to go into the house or let anyone else in. A fire on the hills threatens your house. The neighbor goes in to carry out valuables before the house burns. This action is:

an agency through operation of law

Special agent

an agent with authority to represent the principal only for specific transactions, usually for a limited time

A key element of an agency relationship is:

an agent's ability to transact business for the principal

The principal's duty to indemnify the agent means the principal must

insure the agent against losses suffered during the course of authorized transactions

You hire an agent to sell your house for you. Typically, such an agent receives a fee only if they actually sell the house. This person is most likely:

special agent

Persons appointed by an agent delegated some authority

subagents

Implied ratification usually occurs when:

the agent accepts the benefits of the agreement

For an agency to be valid in most states:

the agent must be subject to the principal's control

To ratify an agreement a principal must know:

the important facts of the agreement

Agency through operation of law is established:

when an emergency exists and the "agent's" actions are in the public interest

Implied authority consists of

the power to do whatever is reasonable and customary to carry out the agency purpose

To establish an agency relationship

the principal and agent must agree to form an agency

A principal's ratification is:

the principal's acceptance of responsibility for an agent's activities

Express authority consist's of the agents

written or oral instructions from principal to agent

In which of the following situations can an agency relationship be created?

X hires Y to buy some property on X's behalf, X makes an oral agreement that Y will work for X's company's general manager, X and Y enter into a written agreement that Y will work for X as the general manger of X's company

To carry out their duties, universal agents are typically granted

a general power of attorney

General agent

a person authorized to execute all regular transactions connected with a business

An agent is trying to sell a house for 100,000 for her principal. The principal will sell her house for as little as 80,000. If the agent tells her cousin to offer 81,000, the agents actions are

a violation go the duty of loyalty

Subagents owe duties to

both the agent and the principal

Express ratification creating an agency by the principal occurs when the principal:

by action shows a clear intent to bound by unauthorized acts of the agent

An agency is couples with an interest is created:

by an agent who has paid for the right to exercise authority with regard to a business

Duties of principal to an agent

cooperating with agent, paying agent for service rendered, reimbursing agent for any reasonable expense, identifying the agent for liability incurred in completing the purpose of the agency

Scott is an agent for Lee and his duties require him to fly to Chicago from Cleveland. Scott gets up late and misses his flight to Chicago so he has to buy a second plane ticket. As principal, Lee:

does not have the duty to reimburse Scott for the second plane ticket because it was Scott's fault

Advantage of an agent

expand business opportunities and access to expertise of agents

Implied ratification of an agency occurs when the principal:

fails to object to unauthorized activities of an agent and accepts the benefits of an unauthorized agreement with a third part

A manager who runs all aspects of a hotel is most likely what kind of agent?

general agent

Agents covered

gratuitous, special, universal, general

Lyle is Thelma's agent. Thelma has made it clear to Lyle that she does not want him to sign the contracts that he negotiates; she retains that power. If, despite Thelma's instructions, Lyle negotiates and signs a contract with Tom committing Thelma to spend thousands of dollars, what will the consequences of Lyle's actions be?

if Tom is justified in presuming Lyle had authority to sign the contract, Thelma will be responsible 2

Duty owed by agent

loyalty, reasonable care, accounting, notification

For an agent to be a fiduciary means to:

occupy a position of trust, honesty, and confidence with respect to the principal

Agency is establish by

operation of law, doctrine estoppel, ratification, written agreement, oral agreement

Universal agent

person designated by a principal to do all acts that can be legally delegated to an agent

A legal document that establishes some agency relationships

power of attorney

An agency is created when an agent agrees to act for, or in place of, the

principal

Through an agency relationship, the agent becomes a representative of the:

principal

Determines scope of authority

principal's conduct, statement of principal, trade customs in business

In an agency, the principal

provides the agent with authority

Principal's duty to cooperate

providing a safe work environment, warning the agent of any unreasonable risk associated with the agency, not furnishing goods of inferior quality to the agent

Clark, a movie producer, was allowed to work at a movie production company's offices (ITC) out of courtesy. His business card listed the ITC address and his phone calls were handled by ITC staff. In the office, he made a deal to produce a movie for another company. When problems developed and the company, presuming Clark worked for ITC, sued ITC. The court would be likely to hold that ITC:

ratified Clark's actions and so became liable for his actions

Many states require agencies for ? to be established in writing

sale of land