Agency Law

termination by operation of law

(1) insanity of principal, (2) bankruptcy, (3) impossibility of performance - destruction of subject matter, (4) when the country of the principal is at war with that of the agent

master-servant relationship

(employer/employee) relationship where agent is under orders of the master and cannot contract with 3rd parties

agent

Person who acts on behalf of the principal

private business corp

SEC regulated, state statue, can be publicly traded or not. Business that is created for commerce, finance ect.

true

T/F Agent and Principal must have contractual capacity

false

T/F Agents are not liable for harm caused to third person's by the agent's fraudulent, intentional, or negligent acts.

false

T/F The agent must have contractual capacity to enter into contracts

false

T/F agents are not liable while acting under good faith and directions of the principal, if their conduct would impose liability on them when acting for themselves

false

T/F an employer isn't criminally liable for employee violation of liquor sales, food law.

true

T/F both the principal and agent are liable in a partially disclosed agency

false

T/F even if third party has no knowledge of the agency agreement, they must still be notified.

false

T/F even with a fully disclosed agency, the agent may still be liable

true

T/F for the employer to be vicariously liable, it must be shown that the employee was acting within the scope of authority.

true

T/F in an undisclosed agency, ONLY the agent is liable

true

T/F someone must be a registered agent in the state of incorporation for a corporation

true

T/F termination doesn't occur until agent is notified

true

T/F when agency is terminated by the act of the principal, notice must be given to third parties

true

T/F when not authorized, the criminal acts of an agent even if during employment, do not leave the principal liable. ie.) bouncer example

true

T/F when the agent exceeds the scope of authority, the principal must ratify to be liable, otherwise the agent is fully liable

true

T/F when third party makes a payment to an authorized agent, the payment is deemed made to the principal Principal must give full credit for payment.

true

T/F wrongful acts committed by an employee that are negligent acts, intentional acts, fraudulent acts, or gov't violation may give rise to BOTH civil and criminal liability to the employer or principal.

true

agency contracts can be expressed or implied

universal agent

agent authorized by the principal to do all acts that can be lawfully delegated to a representative

general agent

agent authorized by the principal to transact all affairs in connection with a particular type of business or trade or to transact all business at a certain place

attorney in fact

agent authorized to act for another under a power of attorney

special agent

agent authorized to transact a specific transaction or to do a specific act

principal-duty of indemnification

agent may suffer losses by agent on behalf of the principal. (paying someone's losses)

condition of ratification

agent must have purported to act on behalf of the principal

contracting agent

agent with authority to make contracts

customary authority

an agent who has express authority to receive payments from third persons, has implied _______ __________ to issue receipts

corporation

artificial being, existing in the eyes of the law as a person, seperate and distinct from the person's who own it

implied agency

authority depends on facts and circumstances of the situation. by conduct

agent-duty of loyalty

cannot misuse confidential information. Cannot be a double agent - working for a competitor. cannot self-deal (real estate)

principal/independent contractor

contractor must use own equipment and pay their own employees

foreign corporation

corporation doing business in a state other than its incorporation

Public corporation

corporation established for governmental purposes and for admin of public affairs

domestic corporation

corporation that is operating in the state which Incorporated it

negligent act

course of employemen, on the job acts for which both agent and principal are liable

principal-duty of cooperation

duty for principal to cooperate with the agent

agent-duty of notification

duty to notify the principal of important information

principal/agent relationship

employer hires an employee and gives that employee the authority to act and enter into contracts on his behalf

intentional act

employer is liable for an intentional tort committed by an employee for the purpose of furthering the employer's business

fraud

employer is liable for fraudulent acts or misrepresentations

respondent superior

employer is vicariously liable for the unauthorized torts committed by an agent or employee while acting in the scope of the agency

government regulation

employer liable due to violations of environmental regulations

feduciary

entrusted with care

municipal corporation

formed for public benefit

incidental authority

if principal authorizes the agent to purchase goods without furnishing funds to the agent to pay them, the agent has implied incidental authority to purchase the goods on credit - is an example of...

vicarious liability

imposing liability for the fault of another. even if agent causes harm to a third person, principal may still be liable both civilly and criminally

express agency

legal contract is formed with mutual consent. states what the principal wants done

agent-duty of accountability

maintain accurate accounting of all transactions undertaking on behalf of the principal

agent-duty of obedience

must obey lawful instructions, but no obligation to obey unlawful instructions

principal-duty of compensation

must pay the agent for their work

agent-duty of performance

must perform lawful duties expressed in the contract and meet standards of reasonable care

closed corporation

not traded publically - small group of owners

tenancy in partnership

ownership relationship that exists between partners under the Uniform Partnership Act

promoters

people who manage the business side of things for a corporation

principal

person fiduciary owes money

condition of ratification

principal must have been capable of authorizing the act both at the time of the act and the time it was ratified

condition of ratification

principal must have full knowledge of the material facts

principal-duty to provide safe working conditions

principal must provide safe working conditions for the agent

principal-duty of reimbursement

reimburse expenses incurred on behalf of the principal

soliciting agent

salesperson

s-corp

similar to LLC, shareholders taxed at personal income, 100 shareholder limit, no stock options

partially disclosed agency

the agent reveals he has a principal, but does not reveal their identity. ie.) Ned Flanders, Agent

true

the person employing the agent must have contractual capacity

fully disclosed agency

third party entering into contract knows that the agent is acting on behalf of a principal, and the actual identity of the principal. ie.) P. Company by Ned Flanders, Agent

undisclosed agency

third party has no knowledge of agent acting on behalf of the principal. ie. ) Ned Flanders

interest in authority

when a lender, in return for making a loan of money, is given, as security, authority to collect rents due to borrower, and to apply those rents to the payment of the debt. here the lender becomes the borrower's agent with an interest in the authority given to collect the rent

merger

when one company acquires another company

apparent authority

when principal's words or conduct leads a third person to believe that the person has authority, and third person relies on that authority

ratification

when the agent exceeds both actual and apparent authority, principal is not bound, but may ratify by accepting benefit or intentionally expressing it

consolidation

when two firms combine to form a new firm

interest in the subject matter

when, for a consideration, agent is given an interest in the property for which she is dealing. agent is authorized to sell property of the principal and is given a lien on such property as security for debt owed to her by the principal.

power of attorney

written authorization to an agent by the principal