Agency Deck test Flashcards
Agency Relationship
Fiduciary relationship that arises when the principal appoints agent to act on the principal’s behalf and agent consents
Agency Elements (ABC)
(1) Assent (2) Principal’s benefit 3) Under Principal’s Control
Capacity Requirements
Principal - contractual capacityAgent - minimal capacity
Disqualifications
(A) for representing both parties(B) for failing to have a required license
Equal Dignities Rule
Requires an agency relationship be in writing when the agent is to enter into certain contracts within the Staute of Frauds
Modes of Creation Agency Relationship
(1) By Acts of Parties(2) By Operation of Law
Operation of Law for Creation of Agency
(1) Estoppel(2) Statute
Agency by Statute
Statutes creating agencies are usually designed to accomplish a limited purpose
Agency by Estoppel
prevents a party from denying that another is his agent after the party has created the impression of agency which a third party has relied on.
Agents Duties to Principal
(1) Duty of Care(2) Duty of Loyalty(3) Duty of Obedience
Subagent
Person appointed by an agent to perform functions that the agent has consented to perform on behalf of the agent’s principal
Duties if Subagent If Authorized
If the principal authorized the agent to appoint the subagent, the subagent owes the principal the same duties as the agent owes the principal
Duties if Subagent Was Not Authorized
If the agent was not authorized to appoint a subagent, the subagent does not owe duties to the principal but does owe duties to the agent
Principals Duties to Agent
(1) All duties imposed by their contract(2) Reasonable Compensation(3) Reimbursement for expenses
When May a Principal be Bound
An agent has the power to bind the principal to a contract when the agent acts with actual or apparent authority.
Three Types of Authority
(1) Actual (2) Apparent(3) Ratified
Actual Authority
Authority that the agent reasonably believes they possess based on the principals dealings with them
Express Actual Authority
Authority conveyed by the principal in words (oral or written)
Implied Actual Authority
Authority the agent reasonably believes they have as a result of the principals words or actions
Implied Actual Authority Includes
(1) Incidental to express authority(2) Arising out of custom known to the agent(3) Resulting from prior acquiescence by principal(4) To take emergency measurements(5) To delegate authority in cases of ministerial acts, where circumstances require, where performance is impossible without delegation, or where delegation is customary(6) To pay for and accept delivery of goods(7) To give general warranties(8) To manage investments
Termination or Revocation of Actual Authority
(1) happening of an event(2) lapse of reasonable time(3) change in circumstances(4) agents breach of fiduciary duty(5) either parties unilateral termination(6) operation of law