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Chp 16
| Term | Definition |
|---|---|
| Power of Attorney | A form of agency relationship that grants another person the authority to enter into transactions |
| What power does a Power of Attorney have? | An individual that gives another the rights to manage their financial affairs in everything |
| Agency Relationship | The principle grants authority to an agent, both consensual and fiduciary. Both agree to the relationship and have equal duties and responsibilities |
| Principles | Those who have others acting on their behalf |
| How are employees agents of the principle, but not all agents are employees? | Ex, An office may higher another business to do a job for them, but the business is not run or owned by the company. But still operates for them. |
| Master-Servant Relationship | A relationship in which the principle (master) exercises a great deal of control over the agent (servant) |
| What factors determine whether a Master-Servant relationship exists? | Level of supervision and control of the agent Nature of the agent's work Regularity of hours and pay Length of employment |
| Independent Contractor | Acts on behalf of another to perform a task but is not under the direct control of the other person |
| What is an example of an Independent Contractor? | Ex, A subcontractor hired to perform partial work on a construction site |
| Are principle responsible for Independent Contractors? | They have less responsibility for independent contractors because they have little control over a contractor's conduct |
| Restatement of Agency | A compilation of the common law of agency followed by the majority of states, in regard to the agent-principle relationship |
| What areas are examined in Agency Law? | 1- Creation of the agency relationship 2- Relationship between principles and agents 3- The relationship of the agents and principles to third parties |
| Express Authority | A written agreement authorizing an agent to act on behalf of another person or business |
| Express Contract | A spoken or written agreement that specifies the terms and limitations of an employee or an agents authority |
| If an agency relationship is created, does it need to be recorded to be shown as evidence? | It does not need to recorded to show evidence of the agreement, but is in the best interest for both employer and employee |
| Capacity | The capacity (age and mental capacity) to make contracts |
| Uniform Durable Power of Attorney Act | Allows an individual to appoint someone to manage their finances and other important matter on their behalf |
| Unincorporated Association | A group that acts as an entity but has no legal existence |
| What is an example of a Unincorporated Association? | Charitable organizations, such as churches |
| Implied Authority | An extension of express authority by custom |
| Actual Authority | Express and Implied Authority |
| Apparent Authority or Agency by Estoppel | Holds a principle liable if the principle makes others believe there is an agency relationship |
| Ratification | The principle reviews a contract and voluntarily decides that, even if the agent did not have proper authority, the contract will be honored as if the agent had full authority |
Created by:
JCWolfe25