Agency

Question 1

What must a principle have in order to ratify a contract that was entered into without authority by an agent

Answer 1

• The principle must be aware of all material facts before ratifying it

Question 2

What id you have a agent who is employed for only 6 months - does it need to be in writing to be enforceable

Answer 2

No because it is less than 1 year - it does not fall under the statute of frauds

Question 3

If you are an agent of a company what duty do you have

Answer 3

An agent has a fiduciary duty to actin the best interest of the principle in matters involving the agency

Question 4

What is an agency coupled with an interest

Answer 4

This is when the agent has an interest in the property or activity of the principle. This would be if you are a collection agent and get a piece of what you collect

This is NOT when you earn sales commission

Question 5

Ingeneral must an agency relationship be in writing

Answer 5

Not in general. However is an agent is acting on a principles behalf in a situation where they would be subject to the Stature of Frauds:

G - goods over $500
R - real estate
O - Over 1 year
S - purity ship
S - statement of consideration of marriage

Question 6

What is ratification

Answer 6

This is a principles affirmation of an agent’s unauthorized act

Question 7

When must a principle notify third parties of the termination of an agency’s existence

Answer 7

– if you achieve the agencies purpose - though this would sent the agency relationship this would not adequately inform any third parties that the relationship has ended so notice is still required

– If the principle terminate the relationship - this is not enough to let third parties know - so notice is still required

• mutual agreement - still must notify third parties

Question 8

Destruction of the subject matter of the agency

Answer 8

This is when an offer terminate automatically if the good or property is destroyed prior to acceptance.

If this happens that you do NOT have to give notice of the termination of an agency’s existence

Question 9

Can there be any apparent authority when the principle is undisclosed

Answer 9

No there can be no apparent authority when the principle is undisclosed

The principle has given the agent actually authority and therefore the principle is bound by the contract , not the agent .

Question 10

If you are the principle have an agent buy real estate for you in your name

Answer 10

• The principle is bound by contract entered into on there behalf
• This is actual authority , not apparent authority
• principle is Not responsible for all torts of the independent contractor (like if they were an employee)

Question 11

What is a agent contracts in their own name without informing the third party of the existence of a principle

Answer 11

The agent is accepting personal liability on the contract - this is because the third party is not informed that the broker is working on behalf of the agent.

Question 12

Does an agency relationship require consideration

Answer 12

It does not

Question 13

What is express authority

Answer 13

this is authority given expressly by the principle

Question 14

What is apparent authority

Answer 14

This is when the action of the principle cause a third party to believe that the agent has authority on behalf of the principal

Question 15

What is a fiduciary duty

Answer 15

This is the highest standard of care - it s what an agent has to the principal

The agent must make known to to the principle any material facts to the principal in duties such as obedience, reasonable care , disclosure loyalty etc.

Question 16

What happens when an agent fraudulently breaches a fiduciary duty

Answer 16

• the principle can terminate the relationship without penalty or liability
• the principle can get constructive trust - this is a legal remedy when one party gets an unjust enrichment at the expense of another

Question 17

When is a principle liable for the torts of agents

Answer 17

agent are individuals and liable for there own torts.

a principle is always liable for the torts of there agents if in the scope of employment

If the agent is an independent contractor - then the principle is less likely to be held accountable

Principle is liable for their agents torts if :

• principle is negligent in hiring the agent
• neglegent is supervising
• ignored a pattern of behavior

Question 18

What if the principle violated the duty owed the agent

Answer 18

• the agent can get monetary damages for past services and future damages
• they can withhold future performances

Question 19

What is an operation of law

Answer 19

This is when the agency is terminated based one:

• death of eater principle or agent
• insanity of principle

Question 20

What is a change in the law

Answer 20

This is when the law changes and the subject matter of the agreement illegal - the agency is terminated

Question 21

What if there is a bankruptcy

Answer 21

Then the bankruptcy compromises the ability to fulfill the contract and terminates the agreement

Question 22

What happens if your agent executes their actual authority, but still has apparent authority - what is the principle liable for

Answer 22

If the principle is fully disclosed - then they are yes liable for the agents actions when if they exceed actual authority because there is apparent authority to contact

The agent is not liable to third parties for contracts made

Question 23

What if the the agent is a partially disclosed agent

Answer 23

This is when the agent acts on behalf of the principle which is known to the third party, but the actual identity is not disclosed

In this case BOTh the agent and the principle are each jointly and severally liable

Question 24

To whom dies a sub agent have fiduciary duty

Answer 24

to both the principle and the agent

Question 25

What is a gratuitous agent

Answer 25

A gratuitous agent is a person who is not paid by a principal for the work s/he does. A person who acts as a gratuitous agent can never be forced to work as an agent. However, a person acting as a gratuitous agent has to follow a principle of good faith.

Question 26

What is an employer responsible for

Answer 26

an employer is generally liable for the torts committed by an employee ( agent

Question 27

What is a tort

Answer 27

a tort is a negligent or intentional act that injures others example - failure to report a dangerous condition

Question 28

What is actual authority

Answer 28

This is the power specifically granted to the agent by the principle - it is not effected by the knowledge or lack of the agency relationship by third parties - fully disclosed, partially disclosed, undisclosed

Question 29

What must a principle and agent relationship require

Answer 29

Both parties must consent to the creation of an agency and have a common understanding of the nature of the agreement.

Question 30

What if the property was destroyed

Answer 30

The agency is destroyed as well and the principle owes nothing to the agent Unless - the agent had property interest in the destroyed assets

Question 31

If you are a business manager - what kind of authority do you have

Answer 31

you have implied authority so you can do ordinary things in a business like pay ordinary business expenses like insurance

Question 32

When an agent acts for an undisclosed principal, the principal will not be liable to third parties if the

Answer 32

When an agent is acting on behalf of an undisclosed principal, the third party is not aware of the agency relationship and believes the relationship is with the agent. As a result, the agent will be liable to the third party but will have recourse against the principal.

Question 33

what do you need as a prerequisite in order to have an agency relationship

Answer 33

the principle must have capacity no need for consideration no need for a written contract no need for the agent to have capacity

Question 34

What is a the relationship for an agent to the principle when they are UNDISCLOSED

Answer 34

The agent t is working on behalf of the principle They have actual authority ( not apparent) Both the principle and agent are liable to the third party, but the principle will be liable to the agent This is as long as the agent's actions were authorized

Question 35

When must a principle provide notice if a termination of agency

Answer 35

In cases of unilateral or agreed termination of actual authority, the principal is required to provide notice to third parties of the termination. If authority is terminated by operation of law, such as in cases of illegality, insanity, or impossibility, no such notice is required.

Question 36

What are the rules to giving notice of a termination of a relationship

Answer 36

Actual notice in the form of a letter to customers who have dealt with the agent is sufficient to prevent further liability to those parties. The principal, however, must also provide constructive notice, such as an ad in a newspaper, to inform those who have not dealt with the agent that the agent lacks authority. Bolt’s letter would not prevent liability to third parties who have not previously dealt with Ace.