Chapter 35 Agency Law

When can an agency be terminated?

1) At a time or event stated in the agreement 2) When the duty is done 3) Mutual agreement of the parties 4) Option of either party

What are the certain duties on the principal to an agent?

1) To compensate the agent 2) To reimburse the agent for money spent in the principal's service 3) To indemnify the agent for losses suffered in conducting the principal's business

What type of relationship does the agent owe to the principal?

A fiduciary relationship of trust and confidence

Actual notification

A written or oral statement to specific third parties with whom the principal has dealt

Express or implied authority is under?

Actual authority

What are the two forms of authority?

Actual or apparent authority

When does an agent have implied authority?

Agent has implied authority to do whatever is reasonable to assume that the principal wanted the agent to do given principal's statements and surrounding circumstances

When does a principal need not compensate an agent?

An agent who materially breached the agency contract or has committed a serious breach of a fiduciary duty *No duty to compensate a gratuitous agent

Gratuitous agent

An agent who receives no compensation for his services

An authority where someone is authorized to act a certain way and the third party reasonably relies on the appearance of authority

Apparent authority

To protect parties, agency law allows agents to bind a principal on the basis of?

Apparent authority

Apparent authority

Arises when principal's conduct leads a third party to believe that an agent (who lacks actual authority) is authorized to act a certain way and the third party reasonably relies on the appearance (cloak) of authority

When is the agreement of an agent / principal voidable?

By minors and the mentally incapicated

Self-dealing, competition with the principal, or acting for another party are all? (Agent)

Conflicts of interest

An agency-based case depends on whether a person who contracts with the principal is an?

Employee (servant) or independent contractor

From actual authority, it is when authority is created by the principal's actual words (written or oral)

Express authority

Actual authority consists of which authorities?

Express authority and implied authority

T/F All duties are delegable

False

T/F To be considered actual authority, the authority must be expressed in words orally or in writing

False

T/F All employees are agents, and all agents are employees

Flase

What is express authority from and what does it mean?

From actual authority Express- created by the principal's actual words (written or oral)

Constructive notification

Generally is publication in a newspaper, but may also be removing the "accoutrements" of the cloak of agency: changing locks or business cards, making sure the former agent returns clothing or keys, etc

What is the exception in the termination of an agency? (interest)

If agent's power is coupled with an interest, agency does not terminate by the principal's revocation, loss of capacity by principal or agent, or death of either principal or agent

When someone does whatever is reasonable to assume that the principal wanted the agent to do given principal's statements and surrounding circumstances

Implied authority

When can an agent bind his principal?

Only when the agent has authority to do so

When do the duties of conflicts of interest end for the agent in a agent/principal relationship?

Right after the duties end after the period of agency

What is the faithless servant doctrine?

The faithless servant doctrine applies if worker's disloyal acts were related to performances of duties and employer suffered damages

T/F A principal is not a fiduciary of an agent

True

T/F Agency is a contract in which an agent is authorized to act on behalf of, and under the control of, a principal

True

T/F An agent has a duty not to use confidential knowledge acquired in employment to compete with principal and the duty exists after the employment

True

T/F Certain duties are non-delegable

True

T/F The duty of confidentiality survives agency

True

T/F All employees are agents, but not all agents are employees

True

T/F Agency is a fiduciary relationship

True

T/F Agency may be created unintentionally

True

T/F Agents may bind a principal on the basis of apparent authority

True

T/F An agent's duty of confidentiality continues after the agency ends

True

Agency

Two party relationship in which one party (agent is authorized to act on behalf of, and under the control of another party (principal)

Renunciation

When the agent stops an agency relationship

Revocation

When the principal stops an agency relationship

Manuel asked his friend Sunil, a good salesman, to sell his car and Sunil agreed. Does an agency relationship exist? a) Yes, Sunil is an agent for Manuel b) Yes, but only if there is a written contract describing the agency's purpose c) No, since friends cannot engage in an agency relationship d) No, unless Sunil sells Manuel's car

a) Yes, Sunil is an agent for Manuel

Principals have the following duties to agent: a) Duty to compensate b) Duty to reimburse for reasonable expenses for doing agency business c) Duty to indemnify the agent for losses suffered due to agency's business d) Both A and B e) All of the above

e) All of the above