Business Organization chapter 1

What are the two ways respondeat superior will apply?

1. The agent is an actual employee and not an independent contractor 2. the employee is acting within the scope of the employer's business

powers will be implied powers if

1. they are necessary to carry into effect the express powers 2. if they are powers ordinarily required in the line of business the agent is conducting on behalf of the principal.

Tort

A civil wrong that is legally recognized

Special power of attorney

A power of attorney authorizing the attorney in fact to act for he principal with regard to a specific action or specific transaction..

General power of attorney

A power of attorney authorizing the attorney in fact to act on behalf of the principal in all matters.

Agency

A relationship where one person acts for another by the latter's authority.

indemnification

Act of compensating or promising to compensate a person who has suffered a loss or may suffer a future loss.

Agency at will

Agency relationship that exists at the will of both parties and may be canceled by either the principal or agent at any time.

Attorney in fact

Any person who acts formally for another person

Elements of an agency relationship

Consent of the principal and agent capacity of the parties to act proper purpose

inhherent

Derived from and inseparable from the thing itself

What are the two kinds of agents?

General agent Special agent

Factors to determine whether an individual is an employee or an independent contractor

How much control does the employer have over the individual? Is the individual engaged in a distinct occupation or business? Is the type of service being performed customarily performed by an employee under the supervision of an employer, or by an independent contractor with out supervision. Who supplies the tools and place of work for the services rendered? How long is the individual employed? How is the individual paid? Is the work performed part of the regular business of the employer? What is the understanding between the parties?

agent is typically not liable for contracts entered into on behalf of the principal

The agent may be liable under a contract if the agent does not disclose the existence of the principal.

Agents are usually liable to third parties for torts committed by them.

The agent may be responsible under certain circumstances for contracts entered into beyond the agent's authority

fiduciary

a person who manages money or property for another person and in whom that other person has a right to place great trust

unlike other forms of contracts, an agency agreement does not necessarily include...

a written agreement exchange of consideration

elements of apparent authority

acts or conduct of the principal. reliance by a third person. change of position by third person to his/her detriment.

what are the two basic kinds of authority?

actual authority apparent authority

implied authority

actual authority given implicitly by the principal to his/her agent

Special Agent

agent authorized to do one or more specific acts in accordance with instructions from the principal

General agent

agent authorized to transact all business of the principal,all business of a particular kind, particular place, or all acts connected with a particular employment or business.

Principal

an employer or anyone else who has another person do things for him/her

Durable power of attorney

attorney that lasts as long as the person remains incapable of making decisions, usually about health care

actual authority

authority a principal intentionally confers upon the agent and certain incidental power that are either necessary or customary

apparent authority

authority to do a specific act created by the actions of the principal either by written or spoken word or by the principal's conduct

conflict of interest

being in a position where your own needs and desires could possibly lead you to violate your duty to a person who has a right to depend on you

estoppel

being stopped by your own prior acts from claiming a right against another person who has legitimately relied on those acts

express

clear, definite, direct,or actual

ratification

confirmation and acceptance of a previous act done by you or by another person

limited liability company

cross between a partnership and a corporation owned by members who may manage the company directly

principal's duty to agent

duty to compensate duty to cooperate duty of care

What are the agents duties to the principal

duty to perform reasonable care fiduciary duty including duty to notify, duty of loyalty

who is the master?

employer who acts as principle by employing the servant to perform services.

In what ways can an agency relationship be terminated?

expiration of term fulfillment of agency purpose Death of either principal or agent change in circumstances-impossibility to perform act or agreement of the parties renunciation by agent revocation of authority by principal termination of apparent authority

What ways can an agency agreement be created by

express agreement implied agreement conduct of the principal/agent ratification estoppel

Limited partnership

formed by general partners and limited partners

registered agent

individual by a corporation to receive service of process on behalf of the corporation and perform such other duties as may be necessary.

Independent Contractor

individual hired by another to perform some specific task or function, but not in a representative capacity.

implied

known indirectly

respondeat superior

let the master answer, Tort is committed by agent in the scope of his/her employment by the principal.

Corporations

organization that is formed under state or federal law and exists for legal purposes as a separate being or an artificial person

limited liability partnership

partnership in which the partners have less than full liability for the actions of other partners, but full liability for their own actions.

agent

person authorized by the principle to act with third parties on the principle's behalf

Under what conditions can a principal be liable for torts against an agent?

respondeat superior tort was committed by the agent by instructions from the principal. principal is negligent in the employment of an improper agent to perform work involving risk to others. principal is negligent in the supervision of the activity. principal gives improper instructions to the agent. principal is negligent in permitting or failing to permit negligent conduct of the agent upon the principal's premisis or under the principal's control

Sole proprietorship

simplest form of business organization unincorporated business owned by one person

Power of Attorney

special type of agency created by a written instrument that authorizes another to act as one's agent

express authoirty

type of actual authority that is expressly granted or conferred to the agent by the principal, either in writing or verbal

Limited liability limited partnership

type of limited partnership permissible in some states where the general partners have less than full liability for the action of other general partners

general partnership

typical partnership in which all partners are general partners

apparent

when a principal intentionally or negligently causes a third party to reasonably believe that another individual is acting as the principal's agent and the third party relies on that belief