Unit 16

An act of Monopoliozation requires?

1) Possession of monopoly power in the relevant market 2)either the unfair attainment of such power or the intent to unlawfully exercise such power once lawfully obtained.

Some states require an agency for any contract within the statute of frauds to be in writing. What is the statute of frauds?

A contract that cannot be completed in one year

What is power of attorney?

A formal written appointment of an agent signed by the principal.

What is criminal liability?

A principal is liabile for his/her own criminal conduct, a principal is only liabile for the agent's criminal conduct when the principal approves or driects the crime, participates or assists in the crime, or when there is a violation of a regulatory statute contistuted the crime.

What is automatic termination by Operation of Law?

A principal's act of filing a petition in bankrupcy terminates an existing agency, a judical declaration of imcompetence or either principal or agent, death, or the illegality of duties to be performed by an agent automatically ends the agency, destruction of the subject matter of the agency, the agent's violation of his/her fiduciary duty, change in circumstances.

An agency coupled with interest is terminated when?

According to the terms of the agreement, by surrender of the authority by the agent, upon destruction of the subject matter of the agency.

If the principal is prevented form asserting the nonexistence of an agency after a third party has taken some action in reasonable reliance on its existence is?

Agency by Estoppel

What condidtion arises if a)a person holds him/herself out as an agent b) The alleged principal knows (or should know of the representation and fails to make and effective denial c) A third party detrimentally relies on the existence of this presumed agency.

Agency by Estoppel

What is division of markets?

Agreeing where to whom, or what to sell, that is dividing markets by product, customer, or geographic location.

What are group boycotts?

Agreements also called concerted refusals to deal, not to sell to or buy from a third party.

What is an Agency?

An expressed or implied consenual relationship formed when two parties agree that one (the agent) will represent the other (the principle) in dealing with third parties

What is a universal agent?

Authorized to conduct all of the principal's business that the principal may legally delegate

What is a general agent?

Authorized to perform all acts relevant to the purpose for which they are engaged.

What is a general power of attorney?

Authorizes the afent to do anything that may be necessary to transact the principal's legal affairs

When acting in fiduciary duty for a principal the agent must not ____?

Compete with the principal, buy from him/herself for the principal without permission, make secret profits on transactions entered by the prinicpal, represent the prinicpal if they have a conflict of interest, misappropriate the pricipals property, and disclose or use confidential information obtained during the agency.

What are tying arrangements?

Conditions the sale of one item on the purchase of a second item form the seller.

When do all powers of attnorey end upon?

Death of the principal

The purpose of the Antitrust Law is to promote what?

Efficient allocation or resources, greater choices by consumers, greater business opportunities, fairness in economic behavior, and avoidance of concentrated political power resulting from economic power.

What are the two legal statuses of an agent?

Employee or Independent contractor

What are the two kinds of actual authority?

Expressed or Implied

The agent must agree to act on the principal's behalf as a _____?

Fiduciary

What are the duteis of an agent?

Fiduciary, Contractual, Duty of Obedience, Duty of Care and Diligence, Duty of Notification, Duty to Account

What are the two kinds of duties the principal has to the agent?

Financial and Occupational

Which kinds of power of attorney end upon incapacity of the principal?

General and Specific

What is a special power of attorney?

Grants authority for only specific transactions

What are the three types of mergers?

Horizontal, Vertical (between supplier and purchaser) and pure conglomerate

Termination by the parties occurs when?

If mutal consent no longer exists by the two parties, when the principal revokes a grant of authority, an agent may renouce the grant of authority by giving the principal notice.

What are the contractual liabilites the principal has to third parties?

If the agent has either actual or apparent authority and the agent enters into contracts with a third party on the principals behalf. Also depending on the principals disclosure to the contractual liability.

Some states require the agency to be in writing under what circumstances?

If the contract involves a sale of land

What is implied actual authority?

Incidental authority inferred from the words or conduct directed to the agent by the principal.

What is ratification?

Is a voluntary election after an unauthorized act purportedly done on one's behalf to treat it as authorized.

What is apparent authority?

Is granted by words or conuct of the principal directed to a third party that reasonably induces the thrid party to infer the agent has actual authority. It gives the agent the power, but not necessarily the right to bind the principal.

What is the Antitrust Law?

Is intended to foster competition by ensuring that markets are driven by customer demand. Markets should be hindered by comspiracies amoung competitors or intentional monopolies.

What is a Monopoly?

Is the power to control prices or exclude competition.

What is a durable power of attorney?

It is effective during a period of incapacity of the principal, as long as it was conferred in writing before the principal became incapacitated.

When may emergency authority be granted?

It may be granted by a court in emergency situations. An agent's delegated authority may be extended if the public interest is served.

When does apparent authority cease?

It may continue after termination of the agency until the third party receives notice and when the agency is terminated by operation of law.

What is respindeat superior?

It prevents individuals from avoiding liability for a tort by hiring an agent to perfom an act.

What is the Clayton Act of 1914?

Mergers and acquisitions of assets or stock are prohibited if the effect may be to substantially lessen competition or create a monopoly. The act allows the Justice Department to prevent mergers.

Can the subagent bind the principal if the agent appointed him/her without authorization?

No

May the prinicpal ratify part of the transaction?

No - it is all or nothing

Can personal acts , such as executing a will be delegated to an agent?

No, they may not be delegated.

What are the principals occupational duties to the agent?

Not to impair the agent's performance, general duty of care, disclose known risks, provide reasonably safe working conditions.

If the agent has duties beyond a contractual obligation they arise by what?

Operation of Law

An agency coupled with interest is not terminated when?

Revocation by the principal, death of the principal, loss of legal capacit of the principal.

What is the Sherman Act of 1890?

Section 1 - makes illegal every contract, combination or conspiracy in restraint of trade in interstate commerce. Section 2 - Prohibits acts of monopolizing, attempts to monopolize, or conspiracies to monopolize.

What is an agency coupled with an interest?

The agent has a specific, current, beneficial interest in the subject matter of the agency. It is irrevocable and the agent's interest in the subject matter is not exercised for the benefit of the principal.

What is the agent's liability to the third party after ratification?

The agent has no liability, however if the prinicpal doesn't ratify the agent is also liable to the third party for breach of the implied warranty of authority.

An agent is an independent contractor when?

The agent is responsible for only the finished product of his/her labor.

What is Duty to Account?

The agent must account for money or property received or expended on behalf of the principal and not commingle his/her money or property with that of the principal.

What is Fiduciary Duty?

The agent must act with utmost loyalty and good faith solely in the principal's interest.

What is Duty of Obedience?

The agent must follow the lawful explicit instructions of the principal, if instructions are not clear the agent must act in good faith and in a reasonable manner, and if an emergency arises and the agent cannot reach the principal the agent may deviate from instructions to the extent that is appropriate.

What is Duty of Notification?

The agent must use reasonable offorts to notify the principal of all information they posses that is relevant to the subject matter of the agency and what the principal knows or shouyld know will impute the principal. A person receives notice by actual knowledge of a fact.

What is Duty of Care and Diligence?

The agent must use the care and skill of a reasonable person in like circumstances and his/her own special skills or knowledge. The agent must avoid injury to the interests of the prinicpal.

When does vicarious liability arise?

The agent's act was a tort intentional or not, the agent's act was not authorized by the principal, the agent was an employee of the prinicpal, the act was within the agent's scope of employment and when a material misrepresentation by an agent occurs.

Is an oral agreement sufficient to form an agency?

The basic rule is that an oral agreement is sufficient to form an agency even if the agent enters into contacts that must be in writing under the statute of frauds.

Who must have the legal capacityto perform the act assigned to the agent?

The principal

What is the principals duty to reimburse?

The principal also has the duty to reimburse the agent for authorized payments made or expenses incurred by the agent on behalf of the principal.

What is the principals duty to indemnify?

The principal has a duty to indemnify the agent. The indemnity is for losses suffered or pexpenses incurred while the agent acted as instructed in a legal transaction or in a transaction that the agent did not know to be wrongful.

What is the principals duty to compensate?

The principal has the duty to compensate the agent for his/her services, this includes keeping accurate records of payments made to the agent. Reasonable value of the agent's serivces will be implied in the absence of an epressly stated compensation.

An agent is an employee when?

The principal-employer has actual right of control over the physical efforts of an employee.

When a principal authorizes an agent to appoint a subagent, the subagent can do what?

The subagent becomes the an agent to both the principal and the agent, binds the principal, owns a fiduciary duty to the principal and the agent.

What is Undisclosed Principal?

The third party is unaware of any agency and believes that (s)he is dealing directly with a principal. The third party may sue the agent of an undisclosed prinicpal and vice versa. The agent is party to the contract.

What is a Partially disclosed principal?

The third party knows the agent is acting for a principal but does not the the identity of the principal. The liability of the agent and a partially disclosed principal is joint and several.

What is a Disclosed principal?

The third party knows the agent s acting for a principal and knows the identity of the principal.

What is joint and several liability?

The third party may sue either or both the agent or the partially disclosed principal and collect any amount from either until the judgement is satisfied.

What are the Principals financial duties to the agent?

The three financial duties of the principal are compensation, reimbursement and indemnification. The principal has no fiduciary duty to the agent.

What is a special agent?

They are engaged for a particular transaction and are authorized to perform specific activities subject to specific instructions

What is a del a credere agent?

They guarantee the obligations of a third party to the principal. (Based on the promose to answer for the debt of another)

What is the Robinson-Patman act of 1936?

This act amended the Clayton Act with respect to price discrimination. Price discrimination involving commodities of like grade and quality is illegal if the effect is to substantially lessen competition or create a monopoly.

What is vicarious liability?

This results from the actions of the the agent for which the principal may be found liable.

What is direct liability?

This results when the principal;s own negligent or reckless action or faiure to act in conducting business through agents if the principal does the following: negligently selects an agent, fails to give proper orders or make proper regulations, fails to employ the proper person, fails to supervise the activity, allows wrongful conduct by others on or with his/her property.

What is the Federal Trade Commission Act of 1914?

This statute prohibits unfair methods of competition and unfair or deceptive acts in or affecting interstate commerce. It created the FTC to enforce its provisions.

The Clayton Act prohibits?

Tying or tie-in sales, exclusive dealing, reciporcal dealing, price discrimination, interlocking directorates.

If the contract is entered into be an agent with a third party on behalf of an incompetent principal the contract is ____?

Voidable by the principal

When does actual authority cease?

When an agency terminates by act of the parties or operation of law.

What is illegal per se?

When an arrangement among competitors is deemed to be unreasonable without inquiry as to harm or excuse.

Under what circumstances may the agent assume liability on any contract?

When making the contract in his/her name, being a party to the contract with his/her principal, or guaranteeing the principal's performance.

When does the agent have the right and power to bind the principal to third parties?

When the agent has received actual authority from the principal through words and conduct.

When can the agent legally bind the principal?

When the agent is under the principal's direction and control and the agent has the authority to do so.

When may an undisclosed principal not be able to enforce a contract?

When the contract: requires that credit be extended by the third party, involves unique personal services of the agent, invovles nondelegable duties, and/or is a negotiable instrument signed by the agent with no indication of his/her status.

When is actual authority conveyed?

When the principal acts as though the agent has authority is words or conduct.

When does an agent have the power to delegate authority or appoint a subagent?

When the principal intends to grant it, with an express authorization, the chageacter of the business, usage or trade, proor conduct of the principal and agent.

When does actual authority create apparent authority?

With secret limitations

What is express actual authority?

Written or spoken words communicated by the principal to the agent.

Can an agency be formed by ratification of another's acts?

Yes

Can an agency be implied in law without the intent to form the relationship?

Yes

Is ratification irrevocable?

Yes

Is the agent liable to the principal for losses resulting from the agent's breach of duty?

Yes

Can an incompetent agent, such as a minor, bind a competent principal?

Yes, because the agent's act is deemed to be the act of the principal.

Is a principal liable in tort because of a personal act or agent's wrongful act that results in harm to a third party?

Yes, the liability of the principal is greater when the agent is an employee rather than an independent contractor.

What is price fixing?

is agreeing to any price, the prohibition applies to all horizontal agreements to set maximum or minimum prices. Also applies to eliminate interest-free and short-term credit.

What are illegal per se violations?

price fixing, division of markets, group boycotts, tying arrangements.

Examples of Horizontal restraints are?

price fixing, division of markets, group boycotts.

Examples of Vertical restraints are?

resale price maintenance, tying arrangements, exclusive dealing arrangements, customer, territorial and location restricitons.