Agency Law
termination by operation of law
(1) insanity of principal, (2) bankruptcy, (3) impossibility of performance - destruction of subject matter, (4) when the country of the principal is at war with that of the agent
master-servant relationship
(employer/employee) relationship where agent is under orders of the master and cannot contract with 3rd parties
agent
Person who acts on behalf of the principal
private business corp
SEC regulated, state statue, can be publicly traded or not. Business that is created for commerce, finance ect.
true
T/F Agent and Principal must have contractual capacity
false
T/F Agents are not liable for harm caused to third person's by the agent's fraudulent, intentional, or negligent acts.
false
T/F The agent must have contractual capacity to enter into contracts
false
T/F agents are not liable while acting under good faith and directions of the principal, if their conduct would impose liability on them when acting for themselves
false
T/F an employer isn't criminally liable for employee violation of liquor sales, food law.
true
T/F both the principal and agent are liable in a partially disclosed agency
false
T/F even if third party has no knowledge of the agency agreement, they must still be notified.
false
T/F even with a fully disclosed agency, the agent may still be liable
true
T/F for the employer to be vicariously liable, it must be shown that the employee was acting within the scope of authority.
true
T/F in an undisclosed agency, ONLY the agent is liable
true
T/F someone must be a registered agent in the state of incorporation for a corporation
true
T/F termination doesn't occur until agent is notified
true
T/F when agency is terminated by the act of the principal, notice must be given to third parties
true
T/F when not authorized, the criminal acts of an agent even if during employment, do not leave the principal liable. ie.) bouncer example
true
T/F when the agent exceeds the scope of authority, the principal must ratify to be liable, otherwise the agent is fully liable
true
T/F when third party makes a payment to an authorized agent, the payment is deemed made to the principal Principal must give full credit for payment.
true
T/F wrongful acts committed by an employee that are negligent acts, intentional acts, fraudulent acts, or gov't violation may give rise to BOTH civil and criminal liability to the employer or principal.
true
agency contracts can be expressed or implied
universal agent
agent authorized by the principal to do all acts that can be lawfully delegated to a representative
general agent
agent authorized by the principal to transact all affairs in connection with a particular type of business or trade or to transact all business at a certain place
attorney in fact
agent authorized to act for another under a power of attorney
special agent
agent authorized to transact a specific transaction or to do a specific act
principal-duty of indemnification
agent may suffer losses by agent on behalf of the principal. (paying someone's losses)
condition of ratification
agent must have purported to act on behalf of the principal
contracting agent
agent with authority to make contracts
customary authority
an agent who has express authority to receive payments from third persons, has implied _______ __________ to issue receipts
corporation
artificial being, existing in the eyes of the law as a person, seperate and distinct from the person's who own it
implied agency
authority depends on facts and circumstances of the situation. by conduct
agent-duty of loyalty
cannot misuse confidential information. Cannot be a double agent - working for a competitor. cannot self-deal (real estate)
principal/independent contractor
contractor must use own equipment and pay their own employees
foreign corporation
corporation doing business in a state other than its incorporation
Public corporation
corporation established for governmental purposes and for admin of public affairs
domestic corporation
corporation that is operating in the state which Incorporated it
negligent act
course of employemen, on the job acts for which both agent and principal are liable
principal-duty of cooperation
duty for principal to cooperate with the agent
agent-duty of notification
duty to notify the principal of important information
principal/agent relationship
employer hires an employee and gives that employee the authority to act and enter into contracts on his behalf
intentional act
employer is liable for an intentional tort committed by an employee for the purpose of furthering the employer's business
fraud
employer is liable for fraudulent acts or misrepresentations
respondent superior
employer is vicariously liable for the unauthorized torts committed by an agent or employee while acting in the scope of the agency
government regulation
employer liable due to violations of environmental regulations
feduciary
entrusted with care
municipal corporation
formed for public benefit
incidental authority
if principal authorizes the agent to purchase goods without furnishing funds to the agent to pay them, the agent has implied incidental authority to purchase the goods on credit - is an example of...
vicarious liability
imposing liability for the fault of another. even if agent causes harm to a third person, principal may still be liable both civilly and criminally
express agency
legal contract is formed with mutual consent. states what the principal wants done
agent-duty of accountability
maintain accurate accounting of all transactions undertaking on behalf of the principal
agent-duty of obedience
must obey lawful instructions, but no obligation to obey unlawful instructions
principal-duty of compensation
must pay the agent for their work
agent-duty of performance
must perform lawful duties expressed in the contract and meet standards of reasonable care
closed corporation
not traded publically - small group of owners
tenancy in partnership
ownership relationship that exists between partners under the Uniform Partnership Act
promoters
people who manage the business side of things for a corporation
principal
person fiduciary owes money
condition of ratification
principal must have been capable of authorizing the act both at the time of the act and the time it was ratified
condition of ratification
principal must have full knowledge of the material facts
principal-duty to provide safe working conditions
principal must provide safe working conditions for the agent
principal-duty of reimbursement
reimburse expenses incurred on behalf of the principal
soliciting agent
salesperson
s-corp
similar to LLC, shareholders taxed at personal income, 100 shareholder limit, no stock options
partially disclosed agency
the agent reveals he has a principal, but does not reveal their identity. ie.) Ned Flanders, Agent
true
the person employing the agent must have contractual capacity
fully disclosed agency
third party entering into contract knows that the agent is acting on behalf of a principal, and the actual identity of the principal. ie.) P. Company by Ned Flanders, Agent
undisclosed agency
third party has no knowledge of agent acting on behalf of the principal. ie. ) Ned Flanders
interest in authority
when a lender, in return for making a loan of money, is given, as security, authority to collect rents due to borrower, and to apply those rents to the payment of the debt. here the lender becomes the borrower's agent with an interest in the authority given to collect the rent
merger
when one company acquires another company
apparent authority
when principal's words or conduct leads a third person to believe that the person has authority, and third person relies on that authority
ratification
when the agent exceeds both actual and apparent authority, principal is not bound, but may ratify by accepting benefit or intentionally expressing it
consolidation
when two firms combine to form a new firm
interest in the subject matter
when, for a consideration, agent is given an interest in the property for which she is dealing. agent is authorized to sell property of the principal and is given a lien on such property as security for debt owed to her by the principal.
power of attorney
written authorization to an agent by the principal