Business law final-Agency

Agent

A party who agrees to act on behalf of another is called an agent.

Principal

A party who employs another person to act on his or her behalf.

tortious conduct

A principal and an agent are each personally liable for their own...

Duty to indemnify

A principal owes the agent for any losses the agent suffers because of the principal's conduct. This usually arises where an agent is held liable for the principal's misconduct.

Contract liability

A principal who authorizes an agent to enter into a contract with a third party is liable on the contract.

Frolic and Detour

Agents sometimes do things during the course of their employment to further their own interests rather than principal's interests. An agent might take a detour to run a personal errand while on assignment for the principal. This is referred to as...

express agency, implied agency, agency by ratification, and apparent agency.

An agency and the resulting authority of an agent can arise in any of the following four ways:

(1) The mutual assent of the parties. (2) the passage of a stated time (3) the achievement of a specified purpose (4) the occurrence of a stated event

An agency can be terminated by the following acts:

Terminated by an act of the parties

An agency contract is similar to other contracts because...

(1) The death of either the principal or the agent (2) the insanity of either the principal or the agent (3)the bankruptcy of the principal (4) the outbreak of a war between the principal's country and the agent's country

An agency contract is terminated by the operation of law in the following circumstance:

Termination by impossibility of performance

An agency relationship terminates if a situation arises that makes its fulfillment impossible.

unusual change in circumstance

An agency terminates when there is an______ that would lead the agent to believe that the principal's original instructions should no longer be valid.

Duty to account

An agent owes a duty to maintain accurate accounting of all transactions undertaken on the principal's behalf.

performance,notification, and accountabilty

An agent owes what to a principal?

implied warranty of authority

An agent who enters into a contract on behalf of another party impliedly warrants that he has the authority to do so.

Duty to perform

An agent who enters into a contract with a principal has two distinct obligations: (1) to perform the lawful duties expressed in the contract and (2) to meet the standards of reasonable care, skill, and diligence implicit in all contracts. These are called...

Implied agency

In many situations, a principal and an agent do not expressly create an agency.

Duty to notify

In the course of an agency, the agent usually learns information that is important to the principal. This information may come from third parties or other sources. An agent owes a duty to notify the principal of important information he or she learns concerning the agency.

Independent contractors

Principals often employ outsiders---that is, persons and businesses that are not employees--to perform certain tasks on their behalf. These perssons and businesses are called...

respondent superior

Principles are liable for the negligent conduct of agents acting within the scope of their employment. This liability is based on the common law doctrine of...

Scope of their employment

Principles are liable for the negligent conduct of agents acting within the...

inherently dangerous activities

Principles cannot avoid liability for________ that they assign to independent contractors.

Dual-purpose mission

Sometimes, principals request that agents run errands to conduct other acts on their behalf while the agent or employee is on personal business.

Fully disclosed, partially disclosed, or undisclosed

The agent can be held liable on the contract in certain circumstances. Imposition of such liability depends on whether the agency is classified as....

Motivation test, and work related test

The courts generally apply one of the following tests in determining whether an agent's intentional torts were committed within the agent's scope of employment.

(1) the loss or destruction of the subject matter of the agency (2) the loss of a required qualification (3) a change in the law

The following circumstances can lead to termination by impossibility of performance:

Principal

The party that employs an independent contractor is called a...

Agency

The principal-agent relationship is commonly referred to as an...

wrongful termination

The termination of an agency extinguishes the power of the agent to act on behalf of the principal. If the principal's or agent's termination of an agency contract breaches the contract, the other party can sue to recover damages for....

(1)rescind the contract with the principal and recover any consideration paid or (2) affirm the contract and recover damages.

The third party in an act of innocent misrepresentation can either...

constructive notice

This goes to any third party who has knowledge of the agency but with whom the agent has not dealt.

Direct notice

This notice goes to all persons with whom the agent dealt. The notice may be oral or written unless required to be in writing

Direct notice and constructive notice

Two forms of notifications of termination of an agency.

Duty to cooperate

Unless otherwise agreed, a principal owes this with and assist an agent in the performance of the agent's duties and the accomplishment of the agency.

If the agent exceeds the scope of his or her authority, the principal is not liable on the contract.

When is the principal not liable in the implied warranty of authority?

Compensation, reimbursement, indemnification, cooperation to an agent

a principal owes duties of...

Apparent Agency

arises when a principal creates the appearance of an agency that in actuality does not exist.

employment

employees may only enter into contracts that are within the scope of their...

Employer-employee relationship

exists when an employer hires an employee to perform some form of physical service

principal-agent relationship

formed when an employer hires an employee and gives that employee authority to act and enter into contracts on his or her behalf.

Work related test

if an agent commits an intentional tort within a work related time or space--for example, during working hours or on the principals premises--the principal is liable for any injuries caused by the agents intentional torts.

Motivation test

if the agent's motivation in committing an intentional tort is to promote the principal's business, the principal is liable for any injury caused by the tort.

Intentional tort

includes acts such as assault, battery, false imprisonment, and other intentional conduct that causes injury to another person.

Intentional misrepresentations

occur when an agent makes statements that he or she knows are not true.

Partially disclosed agency

occurs if an agent discloses his or her agency status but does not reveal the principal's identity and the third party does not know the principal's identity from another source.

Agency by ratification

occurs when (1) a person misrepresents himself or herself as another's agent when in fact he or she is not and (2) the purported principal ratifies (accepts) the unauthorized act.

Undisclosed agency

occurs when a third party is unaware of the existence of an agency.

Innocent misrepresentation

occurs when an agent negligently makes a misrepresentation to a third party.

The doctrine of negligence

principle that if someone expects to derive certain benefits from acting through others, that person should also bear liability for injuries caused to third persons by the negligent conduct of an agent who is acting within their scope of employment.

Fully disclosed Agency

results if a third party entering into a contract knows (1) that the agent is acting as an agent for a principal and (2)the actual indentity of the principal.

Duty to compensate

the agency contract specifies the compensation to be paid. The principal must pay this amount either upon the completion of the agency or at some other mutually agreeable time.

express agency

the agent has the authority to contract or otherwise act on the principals behalf, as expressly stated in the agency agreement.

express agency

the agent may possess certain implied or apparent authority to act on the principal's behalf.

exclusive agency contract

the principal cannot employ any agent other than the exclusive agent.

vicarious liability

the principal is liable because of his or her employment contract with the negligent agent, not because the principal was personally at fault.

Duty to reimburse

the principal owes the agent for all such expenses if there were (1) authorized by the principal, (2) within the scope of the agency, and (3) necessary to discharge the agent's duties in carrying out the agency.

Coming and going rule

under the common law, a principal is generally not liable for injuries caused by its agents and employees while they are on their way to or from work. this is called...

Undisclosed principal

what is the principal called in an undisclosed agency.

he or she is specifically empowered to enter into contracts on the principal employer's behalf

when is an employee considered an agent?