Agency Flashcards
Agency
fiduciary relationship created when two parties manifest the intention that the agent will act on the principal’s behalf and at the principal’s command
Formation of an agency - 3 requirements
- capacity
- consent: to create and continue the agency relationship
- no writing or other formality required.
fiduciary duties owed by agent to principal
loyalty
reasonable care
obedience
fiduciary duties owed by principal to agent
reasonable compensation
reimbursement for expenses
indemnification
cooperation with the agent’s efforts
principal’s K liabilities to third parties
an agent can bind a principal in a K if the agent is acting with authority.
types of authority
actual authority
apparent authority
ratification
actual authority (2 types)
express: based on the principal’s words.
implied: based on the reasonable inferences of the principal’s words/conduct
apparent authority
what the third party reasonably believes that the agent has, based on statements/conduct of the principal.
ratification
after the fact approval by principal
termination of actual authority
- express terms: ie. “you’re fired”
- drastic change of conditions
- operation of law: ie. death or insanity of principal.
- happening of specified event
- agent’s breach of fiduciary duty
fully disclosed agency
agent are not generally personally liable to third parties, as long as:
- the party knew the agent was acting for someone;
- the party knew the ID of the principal
partially disclosed agency
the party knew that the agent was acting on behalf of a principal, but did not know the ID of the principal. party can bind either hte agent or the principal.
breach of warranty of agency authority
where an agent pretends to act for someone, but does not actually have the authority. can be personally liable.
termination of apparent authority
notice of the termination of actual authority
death (regardless of notice)
