Agency Flashcards
Actual authority
power given by a principal to an agent that allows the agent to enter into contracts upon the principal’s behalf
Agent
a party who works on behalf of another party (the principal)
may be general (broad range of duties) or special (specific type of duty/transaction)
Apparent authority
when a third party reasonably believes an agent has actual authority
Disclosed principal
Principal who is known by the third-party
Fiduciary duties
agent’s obligations to act in the best interests of the principal
Independent contractor
works for another party but is not subject to control by that party. generally does not create liability for the other party
Joint and several liability
when principal and agent can both be held liable by third party, or third party may choose to sever liability and only hold principal or agent liable
Partially disclosed principal
when third party knows a principal exists, but does not know the principal’s identity
Principal
party for whom the agent acts
Ratification
when a principal approves a contract that was entered into by an agent lacking authority. The principal is now liable for the contract.
Respondeat superior
“Superior should b e responsible”
When an agent commits a tort in the scope of employment, the principal is held liable
Scope of employment
Agent’s actions that occur substantially in the work environment
Third party
party who is interacting with either the principal or the agent
Undisclosed principal
when third party to a contract does not know that a principal exists
Del credere
sales agent who guarantees the accounts of the customers (not required to be in writing)
