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Chapter 33 Agency

Kubasek Dynamic business Law Chapter 33 Agency formation and duties

QuestionAnswer
Agency the relationship between a principal and an agent
Agency by estoppel Agency formed when a principal leads a third party to believe that another individual serves as his or her agent but the principal accepts or ratifies the unauthorized act.
creation of the Agency relationship can be created only for a lawful purpose, and almost anyone can serve as an agent. Are Consensual relationships formed by informal oral agreements or formal written contracts.
apparent agency An agency relationship created by operation of law when one party, by her actions, causes a third party to believe someone is her agent even though that person actually has no authority to act as her agent. Also called agency by estoppel.
constructive trust 1. impled trust in which a party is named to hold the trust for its rightful owner. 2. An equiptable truct imposed on someone who wrongfully obtains or hold legal right to property he should not possess.
duty of loyalty An agent's obligation to act in the interest of the principal.
duty of notification an agent's obligatoin to inform the pricipal of the agent's actions on the principal's behalf and of all relevant information.
duty of compensate A principal's obligation to pay an agent for his or her services
expressed agency Agency formed by making a written or oral agreement.
Agent one authorized to act for and on behalf of a principal.
Principal: one who hires an agent to represent him or her
Fiduciary one with a duty to act primarily for another person's benefit
Power of attorney Document giving an agent authority to sign legal documents on dehalf of the principal
durable power of attorney: Power of attorney intended to continue to be effective or to take effect after the principal has become incapacitated.
Agency of implied authority Agency formed by implication through the conduct of the parties
Agency by ratification agency that exists when an individual misrepresents himself or herself as an agent for another party and the principal accepts or ratifies the unauthorized act.
Agency relationship is a fiduciary relationship (a relatioship of trust) in which an agent acts on behalf of the principal
Principal-agent relationship exists when an employer hires an employee to enter into contracts on behalf of the employer
Employer-employee relationship exists when an employer hires an employee to perform some sort of physical service
Employer-Independent contractor relationship exists when an employer hires persons, other than employees, to conduct certain tasks.
The duties of the principal Duty of compensation Duty of reimbursement and indmnification Duty of cooperatoin Duty of safe working conditions
The duties of the agent: Loyalty performance notification obedience accounting
The rights and remedies of the PRINCIPAL construcive trust avoidance indemnification
the rights and remedies of the AGENT Tort and contract remedies demand for an accounting specific performance
agency relationships are of four forms or authority: Expressed agency or agency by agreement implied authority apparent agency, or agency by estoppel ratification
Two requirements for agency by ratification 1. Individual must misrepresent himself as an agent for another party 2. The principal must accept or ratify the unauthorized act.
Ratification to be effective, 2 requirement must be met: Principal must have complete knowledge of all material facts regarding the contract. 2. Principal must ratify the entirety of the agent's act. (principal cannotaccept certain parts of the agent's act and reject others)
Employees are: agents of an employer.
Independent contractors cannot enter into contracts on behalf of the principal unless the contractor possesses authority from the principal.
Created by: tinafici