BULE 303 - Worksheet 16.2: Duties of Agents and Principals and Agent's Authority

Elia and Sonia ask Fay to be the administrator of their will and the guardian of their children if they pass away. Fay agrees. Fiduciary relationships such as this one:

involve a high degree of trust and confidence

TRUE OR FALSE - The principal has a duty to indemnify an agent for liabilities incurred because of authorized and lawful acts and transactions.

TRUE

An ordinary power of attorney ends when:

a person giving the power dies or becomes incapacitated

notary public

a public official authorized to attest to the authenticity of signatures.

power of attorney

a written document, which is usually notarized, authorizing another to act as one's agent; can be special or general

Delia gives her agent, Mike, money to purchase a commercial oven. Mike takes the cash and deposits it into his personal checking account and then accidentally spends some of it. Mike has violated his duty of

accounting

When a third party reasonably believes a person has authority to act on another's behalf, even if that person does not have such authority, the situation is known as

apparent authority

express authority

authority expressly given by one party to another. in agency law, an agent has express authority to act for a principal if both parties agree, orally or in writing, that an agency relationship exists in which the agent had the power at act in the place of, and on behalf of, the principal.

implied authority

authority that is created not by an explicit oral or written agreement but by implication. in agency law, implied authority can be conferred by custom, inferred from the position the agent occupies, or implied by virtue of being reasonably necessary to carry out express authority .

apparent authority

authority that is only apparent, not real. in agency law, a person may be deemed to have had the power to act as an agent for another party if the other party's manifestations to a third party let the third party to believe that an agency existed when, in fact, it did not.

An agent's implied authority can be inferred by

custom

TRUE OR FALSE - The principal-agent relationship is fiduciary and therefore not based on trust, but specific laws.

false

Under the equal dignity rule:

if a contract must be in writing to be executed, an agent's authority must also be in writing.

equal dignity rule

in most states, a rule stating that express authority given to an agent must be in writing if the contract to be made on behalf of the principal is also required to be in writing.

An agent's authority to act for a principal:

may be actual or apparent

Louisa is moving from New York to Los Angeles. Grover agrees to act as her agent to sell her New York apartment. As her agent, Grover owes Louisa all of the following duties EXCEPT

payment

the five duties the agent owes the principal.

performance, notification, loyalty, obedience, accounting

The degree of skill or care required of an agent is usually that expected of a(n) (BLANK) person under similar circumstances.

reasonable

ratification

the act of accepting and giving legal force to an obligation that previously was not enforceable.