Business Law Chapter 20
apparent agency
n agency relationship created by operation of law when one party, by his actions, causes a third party to believe someone is his agent when that person actually has no authority. Also called agency by estoppel
disclosed principals
A principal whose identity is known to a third party. The third party is aware that the agent is making an agreement on behalf of the principal.
partially disclosed principal
A principal whose identity is not known by a third party, although the third party is aware that the agent is making an agreement on behalf of a principal. Also called unidentified principal
duty of cooperation
A principal's obligation to assist an agent in the performance of the agent's duties and not to interfere with reasonable conduct of the agent.
duty to compensate
A principal's obligation to pay an agent for his or her services.
duty to provide safe working conditions
A principal's obligation to provide proper equipment, suitable premises, and a safe working environment in accordance with federal and state statutes.
duty of reimbursement and indemnification
A principal's obligation to reimburse an agent for any expenses or losses incurred by the agent on the principal's behalf.
equal dignity rule
A rule requiring that contracts that would normally fall under the statute of frauds and need a writing if negotiated by the principal must be in writing even if negotiated by an agent.
Power of Attorney
A specific form of express authority that grants an agent specific powers.
Expressed Agency
An agency created in a written or oral agreement. Also called agency by agreement
agency by ratification
An agency relationship that arises when an individual misrepresents himself or herself as an agent for another party and that party accepts the unauthorized act.
agency coupled with an interest
An agency relationship that is created for the benefit of the agent, not the principal.
gratuitous agent
An agent who acts without being paid for his or her services.
duty of loyalty
An agent's obligation to act in the interest of the principal.
duty of obedience
An agent's obligation to follow the lawful instruction and direction of the principal.
duty of notification
An agent's obligation to inform the principal of the agent's actions on the principal's behalf and of all relevant information.
duty of accounting
An agent's obligation to keep an accurate account of the transactions of money and property made on behalf of the principal.
duty of performance
An agent's obligation to perform the duties specified in the agency agreement and to do so with reasonable skill and care.
respondeat superior
Latin for "let the superior speak"; the principle by which liability for harm caused by an agent/employee is held by the principal/employer.
actual notice
Notice of agency termination that is given by directly informing third parties, either orally or in writing.
constructive notice
Notice of agency termination that is usually given by publishing an announcement in a newspaper.
implied authority
The authority of an agent that arises by inference from the words and actions of the principal.
express authority
The authority of an agent that arises when the principal explicitly instructs the agent to do something. Also called <em>actual authority.
vicarious liability
The liability or responsibility imposed on a person, a party, or an organization for damages caused by another; most commonly used in relation to employment, with the employer held vicariously liable for damages caused by its employees.
durable power of Attorney
A document that specifies that an agent's authority is intended to continue beyond the principal's incapacitation.
Independent contractors
A person who is hired to perform a task for another but who is not the other's employee.
undisclosed principal
A principal whose existence is not known by a third party. That is, the third party does not know an agent is acting on behalf of a principal.