14 Agency

Question 1

Agency Relationship

Answer 1

One party acts on behalf of another to fulfill contract obligations

Question 2

Principal

Answer 2

Actual authority

Question 3

Agent

Answer 3

(Apparent authority) needs authority from principal to act on the principal’s behalf. Must be mentally and physically sufficient

Question 4

Agency Agreement

Answer 4

No contract needed, just need consent.

Question 5

Statute of Frauds

Answer 5

Agency to sell real estate, agency to run for a period exceeding 1 year

Question 6

Fiduciary Duty

Answer 6

Agent has fiduciary duty to principal, but principal does not owe fiduciary duty to agent

Question 7

Actual Authority

Answer 7

Principal gives express authority and implied authority

Question 8

Ratification

Answer 8

Principal can ratify when the agent acts without authority, meaning they can approve of the actions anyway

Question 9

Fully disclosed principal

Answer 9

3rd party knows identity of principal, principal is liable to 3rd party (not agent)

Question 10

Partially disclosed principal

Answer 10

3rd party knows agent is acting for another, not identified, principal and agent both liable

Question 11

Undisclosed principal

Answer 11

3rd party believes agent is the principal, both agent and principal are liable

Question 12

General Agent

Answer 12

broad authority to act for principal

Question 13

Special Agent

Answer 13

Authority limited to a single or series of transactions

Question 14

Sub-agent

Answer 14

agent appointed by another agent who is authorized by principal to appoint sub-agents, fiduciary duty to agent and principal

Question 15

Agreement termination

Answer 15

contracted end or mutually agreed end

Question 16

Unilateral termination

Answer 16

principal dismisses the agent or agent resigns

Question 17

Operation of law

Answer 17

agency terminates due to death or insanity of principal, illegality, bankrupcy

Question 18

Agency coupled with an interest

Answer 18

Agent has some legal rights to agency, therefore cannot be terminated by the principal

Question 19

Actual notice

Answer 19

3rd parties directly informed that agency has terminated- if agent has worked with 3rd party in the past

Question 20

Constructive notice

Answer 20

termination is made in publications likely to be read by 3rd party (public notice)

Question 21

agent is liable to principal for losses if

Answer 21

acted without actual authority, binding the principal to it’s apparent authority

Question 22

principal is liable to agent for losses if

Answer 22

agent acts with actual authority, expressly authorized by principal

Question 23

Breach by principal

Answer 23

agent can recover past services, future damages, authority to withhold future performance

Question 24

Tort

Answer 24

action that causes injury to person or property

Question 25

Principal is responsible for torts by agent if

Answer 25

committed in the course of the agency relationship, (not responsible for agent crimes)