chapter 21

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Apparent Agency

Agency that arises when a principal creates the appearance of an agency that in actuality does not exist. - employer makes it look like somebody works for him

Agency / statute of frauds

Express agency occurs when a principal and an agent expressly agree to enter into an agency agreement with each other. Express agency contracts can be either oral or written unless the statute of frauds stipulates that they must be written. - If a principal and an agent enter into an exclusive agency contract , the principal cannot employ any agent other than the exclusive agent. If do the agent can obtain damages

terminated by an act of the parties

1) The mutual assent of the parties 2) If a stated time has lapsed 3) If a specific purpose is achieved 4) The occurrence of a stated event.

Independent Contractor

A person who contracts with another to do something for him who is not controlled by the other nor subject to the others right to control with respect to his physical conduct in the performance of the undertaking.

Termination by operation of law

Agency contracts can be terminated by operation of law. An agency contract is terminated by operation of law in the following circumstances: 1) the death of either the principal or 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 principals country and the agents country - if it is a termination by law there is no duty to notify third parties about the termination.

Termination of Agency

An agency contract can be terminated by an act of the parties , by changed circumstances , by impossibility of performance , and by operation of law.

terminated by impossibility of performance

An agency relationship terminates if a situation arises that makes its fulfillment impossible. - the loss or destruction of the subject matter of the agency - the loss of a required qualification - a change in the law

terminated by changed circumstances

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

Capacity to appoint an agent

Any person who has the capacity to contract can appoint an agent to act on his or her behalf. Generally , persons who lack contractual capacity , such as insane persons and minors cannot appoint agents. However , the court can appoint a legal guardian.

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 (accept's) the unauthorized act. In such cases , the principal is bound to perform, and the agent is relived of any liability for misrepresentation.

Notice of Termination of Authority

The termination of an agency extinguishes an agent's actual authority to act on the principals behalf. However, if the principals fails to give the proper notice of termination to a third party , the agent still has apparent authority to bind the principals to contracts with these third parties. To avoid this liability , the principals needs to provide the following notice: - Direct notice = to all persons with whom the agent dealt. ( oral or written) - Constructive notice = to any third party who has knowledge of the agency but with whom the agent has not dealt

Agency coupled with an interest

is a special type of agency relationship that is created for the agents benefit . This type of agency is irrevocable by the principal. Is not terminated by the death or incapacity of either the principal or agent.

Dual Agency

occurs when an agent acts for two or more different principals in the same transaction. This practice is generally prohibited unless all the parties involved in the transaction agree to it. If an agent acts as an undisclosed dual agent , he or she must forfeit the compensation.

Fiduciary Duties

principals duties - principals duty to compensate , principals duty to reimburse , principals duty to indemnify , principals duties to cooperate.


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