5.2 DUTIES AND LIABILITIES OF AGENTS AND PRINCIPAL

Question 1

WHEN IS A PRINCIPAL LIABLE FOR AN AGENT’S LACK OF REASONABLE CARE?

Answer 1

EMPLOYEES ARE RESPONSIBLE FOR THEIR OWN TORTS HOWEVER WITHIN THE SCOPE OF EMPLOYMENT EMPLOYERS ARE LIABLE

FOR INDEPENDENT CONTRACTORS THEY ARE LIABLE FOR THEIR OWN TORTS.

SEE SCREENSHOT

Question 2

WHAT IS THE DOCTRINE OF VICARIOUS LIABILITY ALSO KNOWN AS RESPONDENT SUPERIOR

Answer 2

A PRINCIPAL IS LIABLE FOR THE NEGLIGIENT TORTS OF AGNETS COMMITTED IN THE SCOPE OF EMPLOYMENT.

TORTS COMMITTED BY EMPLOYEE HOLD THE PRINCIPAL LIABLE

TORTS COMMITTE BY AN INDEPENDENT CONTRACTOR GENERALLY DOES NOT HOLD THE PRINCIPAL LIABLE.

Question 3

WHAT CONSTITUTES TERMINATION IN AN AGENCY AND PRINCIPAL?

Answer 3

TERMINATION ENDS THE AGENCY RELATIONSHIP, THE AGENT NO LONGER HAS ANY AUTHORITY TO ACT ON BEHALF OF THE PRINCIPAL

WHEN AN AGENCY IS COUPLED WITH AN INTEREST, THE PRINCIPAL DOES NOT HAVE THE POWER TO TERMINATE THE RELATIONSHIP.

A COUPLED INTEREST IS WHEN THE AGENT HAS LEGAL RIGHTS IN THE SUBJECT MATTER
DEATH OF PRINCIPAL/AGENT
SEE SCREENSHOT

ACTUAL NOTICE - DIRECT TO THIRD PARTIES
CONSTRUCTIVE - PUBLIC NOTICE

Question 4

WHO IS RESPONSIBLE TO THIRD PARTIES WHEN A PRINCIPAL IS DISCLOSED?

COVER EXPRESS, IMPLIED, AND APPARENT

Answer 4

WHEN A PRINCIPALS IDENTITY IS FULLY DISCLOSED, ONLY THE PRINCIPAL IS LIABLE UNDER ANY CONTRACT THE AGENT MAKES WITH A THIRD PARTY.

Question 5

WHO IS RESPONSIBLE TO THIRD PARTIES WHEN A PRINCIPAL IS PARTIALLY DISCLOSED?

COVER EXPRESS, IMPLIED, AND APPARENT

Answer 5

WHEN A PRINCIPAL IS PARTIALLY DISCLOSED, THE THIRD PARTY KNOWS THERE IS A PRINCIPAL BUT DOES NOT KNOW THE PRINCIPALS IDENTITY. IN THIS CASE, BOTH THE AGENT AND THE PRINCIPAL ARE LIABLE UNDER ANY CONTRACT THE AGENT MAKES WITH A THIRD PARTY.

APPARENT AND NO AUTHORITY ARE NOT POSSIBLE BECAUSE THE 3RD PARTY DOES NOT KNOW WHO THE PRINCIPAL IS. THEREFORE ONLY THE AGENT IS LIABLE

Question 6

WHO IS RESPONSIBLE TO THIRD PARTIES WHEN A PRINCIPAL IS UNDISCLOSED?

COVER EXPRESS, IMPLIED, AND APPARENT

Answer 6

WHEN A PRINCIPAL IS UNDISCLOSED, THE THIRD PARTY IS LED TO BELEIVE THE GAENT IS ACTING ON THEIR OWN BEHALF.

APPARENT AND NO AUTHORITY ARE NOT POSSIBLE BECAUSE THE 3RD PARTY DOES NOT KNOW WHO THE PRINCIPAL IS. THEREFORE ONLY THE AGENT IS LIABLE

Question 7

WHAT ARE THE RESPONSIBILITIES IN AN AGENCY

Answer 7

• AGENT OWES THE PRINCIPAL A FIDUCIARY DUTY NOT THE OTHER WAY AROUND.
• MEETING OF THE MINDS
• PRINCIPAL MUST HAVE LEGAL CAPACITY NOT THE OTHER WAY AROUND

Question 8

5.2 WHO CAN THE INJURED PARTY PRESS CHARGES AGAINST WHEN AN EMPLOYEE (AGENT) COMMITS A TORT?

Answer 8

ANY THIRD PERSON INJURED BY AN EMPLOYEE (AGENT) WHEN COMMITTED WITHIN THE COURSE OF EMPLOYMENT, CAN PROCEED AGAINST EITHER THE EMPLOYEE OR EMPLOYER.

IF THE EMPLOYEE PAYS FOR DAMAGES HE IS ENTITLED TO INDEMNIFICATION FROM THE EMPLOYER (PRINCIPAL).

Question 9

WHAT IS THE TAX BENEFIT RULE?

Answer 9

IF AN AMOUNT USED AS A DEDUCTION IN A PRIOR YEAR IS RECOVERED IN A LATER YEAR, IT MUST BE INCLUDED IN GROSS INCOME TO THE EXTENT OF THE ORIGINAL DEDUCTION.

THIS IS WHY STATE TAX REFUNDS ARE ONLY TAXABLE IN EXCESS OF THE AMOUNT DEDUCTED ASSUMING IT WAS ITEMIZED FOR INDIVIDUALS,

FOR CORPORATIONS, THEY ARE NOT BOUND BY THE 10K LIMITATION, THEREFORE A STATE TAX REFUND IS ALWAYS INCLUDED IN GROSS INCOME BECAUSE IT DERIVES A BENEFIT OF BEING DEDUCTED IN A PREVIOUS YEAR.

Question 10

WHAT ARE THE PRINCIPAL’S DUTIES TO AN AGENT?

Answer 10

1) COOPERATE
2) INDEMNIFY THE AGENT FOR EXPENSES [GRATUTIOUS AGENT ARE NOT PAID, HOWEVER THE ARE INDEMNIFIED]
3) COMPENSATE THE AGENT FOR SERVICES PERFORMED

Question 11

WHAT ARE THE OVERALL DUTIES IN A PRINCIPAL AND AGENT RELATIONSHIP?

Answer 11

Question 12

WHAT IS CONSTRUCTIVE TRUST?

Answer 12

IS WHEN ONE PARTY HAS BEEN UNJUSTLY ENRICHED AT THE EXPENSE OF ANOTHER. A COURT WILL DECLARE THAT AN AGENTIS UNJUSTLY HOLDING AN ASSET AND WILL HAVE TO TRANSFER IT BACK TO THE PRINCIPAL