agency Flashcards
general
Agency – General Law
Under agency common law, an agency relationship is a fiduciary relationship whereby
the agent may bind the principal in contract and tort theory if acting within the scope of
the agency or employment, as long as it wasn’t a significant detour, and whether by
expressed authority, implied authority or apparent authority. Agency is often measured
by the amount of control the employer has over the employee. Agents have a fiduciary
duty of obedience and loyalty, and to act in the best interests of the principal.
Agency Blurb:
It appears we have an agency relationship between _____ and _____. Agency is a
fiduciary relationship whereby, the agent may bind the principle in contract or tort
theory if acting within the scope of their agency authority, whether it is by implied,
apparent or expressed authority. Agents have a fiduciary duty of loyalty and obedience
to the principal.
Under the doctrine of respondeat superior and vicarious liability the principle may be
liable for the wrongful acts of the agent if they were made during the scope and course
of the agency relationship, unless the court determines that the wrongful act was made
while the agent was engaged in a significant frolic, or departure from, the scope of the
agency. Minor detours will still be deemed within the scope.
Apparent Authority
____ may argue that there was apparent authority between the parties as ____
reasonably relied to her/his detriment of the actions and representations of ____.
Implied Authority
The agent may argue that s/he had power to act on behalf of the principal, but outside
of any express agreement because it is reasonably necessary to perform those acts
granted under the expressed authority.
Ratification of Authority
Although the agent’s acts were outside the expressed authority when the principal
______ (some act of acceptance, usually depositing a check), the principal ratified those
actions by the agent and will be estopped from denying authority by the agent.
my outline
Agency
my outline
Is the creation of an Agent principal relationship, in which the agent acts on behalf of the principal when dealing with third parties.
Formation
1. Consent from both to agency relationship
2. Principal and agent have the compactly to enter into a k.
3. Agent need a license to act n principal’s behalf otherwise the actions are disaffirmed.
4. No writing required unless interest is property, will not be completed in 1 year, power of attorney
Agency authority
* Apparent- where it appears to 3rd parties the agent have control to make decisions for the principal, unless the third party has reason to know the principal do not have authority.
- Actual(express or implied)- The agent has express or implied authority to act on the principal behalf
- Inherent - principal is held liable based on the doctrine of respondeat superior.
- Operation of law: ct created to stop the denial of a agency relationship when a third party relied on it
- Ratification- The agent holds out as having authority for the principal in which he does not but then the principal ratify the agent act. Basically the agent does an act, the principal gets knowledge, and the principal affirms the act express or implied(enjoy the benefits) when should have declined.
Rights and duties of the parties
- Agent fiduciary duties
Agent’s Duty of loyalty and care to obey reasonable instructions and act solely or the benefit of the principal with respect to matters within the scope of agency. - A To P
Unless they have a k that says otherwise, (loyalty, obedience, and care)
Loyalty- no adverse interest or failure to disclose interest
Obedience- must obey P instructions
Care- handle agency with care, duty to notify p on agency related matters - P to A
-Pay reasonable compensation
-Reimburse A for loses and expenses A incurred for P even if in his duties
-p must cooperate with agent to carry out agency functions - A & P To Tp’s
-P liable to TP for acts A carry out if:either P had knowledge of A act or if TP had apparent authority, or P was disclosed by A: but the act must have been within the scope of A’s duties
-Agents personally liable if go beyond scope of au, - Disclosed P- tp knows of P’s existence, and identity (p liable)
- Partially disclosed- tp knows existence but not identity of P (possibly both p and a)
- Undisclosed- tp knows neither the existence or identity of principal. (Possibly both p and a)
Possiblily- depends on whether agency exceeds the au only agent liable.
If tp wins against agent then cant go after P
Remedies to P for A’s breach of duty
1. Contractual - breach of k duties
2. Tort: liability arising from agents neg. Or recklessness
3. accounting= determine missing money or property
4. Withholding of compensation- principal can deny payment
(Special type of agency relationships)
- Respondent superior/ vicious liability of P to A acts
- Generally, P is not liable if the act is outside scope of employment
- P liable for A torts if p act as employer, the tort was within the scope of employment,
OR- A act was slightly out of scope of duty (wasn’t in the scope but was done in the intention to benefit the company/further er business interest. Therefore, a ER can foresee that a EE would do that act)
- Or master servant relationship where P controls A
- Ind. K relationship
- P not liable to independent contractors since the ind. has control over job execution unless
-Independent contractor is engaged in a inherently dangerous activity
-p controls the the manner, method and pay of how the job will go - P knowingly or negligently hires an incompetent contractor
- P not liable for intentional tort unless its a natural incident to carry out tort
- Ind. k work creates a danger to a business invitee (store ex’s)
Power of att.
Need Written authorization
Durable POA is presumed to continue even if P is incapacity. If P wants it to end once they are incapacity the agreement must state that.
Real estate brokers
-cant bind principal (buyer) to K
-job is to produce a buyer who is ready willing and able to K.
- If a exclusive right to sale, will still get commission no matter who got the buyer.
Termination of agency relationship
* Party desire to terminate, must have notice
* expiration- there is express terms of the expiration date
* Purpose fulfilled = the purpose of the agency is fulfilled and done
* Bankruptcy of the principal
* termination be law(death, lose of capacity, by wither party) Agent materially breach fiduciary duty to principal EXCEPTION
Agency is irrevocable if the agent’s authority is coupled with an interest.
1. Agent has an interest in the subject matter of the au. (Possession title or lien) and is acting for himself and the P
2. Or agent’s authority is given as security (the benefit of a tp that is entitled to rely on the agents acts.
Terminates when:
1. The agent’s interest in the subject matter is extinguished
2. The TP is paid/received the benefit
Partnership
General , limited/LP, LLP
General
-all jointly and personably liable for partnership debts
- No formal agreement or filing with state but can be
- Partnership by estoppel because held self out as partners
- There Is profit sharing
- All improvements are shared, lose are split to their share in profits
- All have equal rights limited liability)
Rights same as GP
Liable only for its own acts that they supervise or direct
Formation filing with state with info (I needed)
LP(limited)(more for investors so no duties )
Manage and control day to day
Limited authority
No fiduciary duty
Can compete or have adverse interest generally investors
Liable only to extent of investment
Formation- file certificate W State, names and address of each general partner ship and their signature
Fiduciary duties
Loyalty- (look out for business interest first)account, don’t compete
Care- no misconduct of law, reckless negligence
Obedience- act reasonably and seek diections from all partners
*each partner can ask to inspect financial records
Business liable K’s
-k’s are expressly authorized and made by partners in the scope of business ..
-to not be liable other side need to know they don’t have authority or its something outside the scope of the business and all business partners need to sign
Buisness in torts
-all liable if tort committed in the ordinary business or with authority of the partnership
GP
- All parties is liable to the extent of there share/profits in business
- Can be indemincation (1 pay all and seek reimbursement from partners)
LP and LLP
Have limited liability
Dissociation -
partner don want to be involved any more
-In rights, profits, and duties expect for things owed before dissociation
-Partners can buy them out
Dissolution
Have to be by ending date if none then just give other partners notice
-wind up business, liquidate assets, pay out creditors first
Business can continue until winding up is done.
-partnership assets are those purchased by the partnership or given to the partnership. (money, tools, recipes, good will; etc)
-good will- is the going concern value of the business. if a value cannot be placed upon it, then it’s questionable of whether it exists.
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Parties duties
- Promoter make contracts/ find funding/bind corp
- Directors determine when and where to distrubrite shares, elect officers, can decided officers and share directors duties with them as long as its duties the directors actually have
- Shareholder select and remove directors, adopt amend or repel by laws, oppose fundamental changes in corp(merges sale of assets), inspect corp books with written notice 5 days, if by laws or article don’t need notice
- Officers run day to day activities , or additional things directed by directors as long as in directors power, cant make major decisions without corp consent
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Liabilities
Promoter- Liable even after crop come into existence unless novation or indeminification
