agency law Flashcards
<p class=”large” style=”text-align:center”;>What is Agency Law?</p>
<p class=”large” style=”text-align:center”;>Agency Law deals with someone’s ability to bind you to a contract with a third party</p>
<p class=”large” style=”text-align:center”;>What is required for Agency to exist?</p>
<p class=”large” style=”text-align:center”;>Both parties must consent to the relationship and intend for an Agency relationship to exist
Agent owes Principal fiduciary duty
Principal doesn’t owe Agent fiduciary duty
A contract is NOT required and an Agency agreement is not based on Contract Law; Exception – If duties cannot be performed within a year; a signed writing is required</p>
<p class=”large” style=”text-align:center”;>What is Actual Authority in an agency?</p>
<p class=”large” style=”text-align:center”;>Actual Authority is what is expressly granted or is implied by the duties you expect the Agent to perform and is necessary to carry them out</p>
<p class=”large” style=”text-align:center”;>What is Implied Authority in an agency?</p>
<p class=”large” style=”text-align:center”;>When authority is expressly granted; it is implied that the agent has the authority to carry out the duties
Does not include authority to sell or alter a business</p>
<p class=”large” style=”text-align:center”;>What is Apparent (Ostensible) Authority in an agency?</p>
<p class=”large” style=”text-align:center”;>Apparent Authority is based on the third party’s perspective – they believe that the Agent has the
authority to enter into a contract based on:
- Prior dealings with agent
- Agent’s title leads the third party to believe they can enter into a contract
- The Principal hires the Agent to carry out duties that normally carry with them the rights to enter into contracts </p>
<p class=”large” style=”text-align:center”;>How is an Agency terminated?</p>
<p class=”large” style=”text-align:center”;>*Both Agent and Principal agree to terminate
- Principal fires Agent
- Agent fires Principal
- Agent breaches their contract by doing something like violating their obligation to act as a fiduciary to Principal</p>
<p class=”large” style=”text-align:center”;>How do you terminate Apparent Authority?</p>
<p class=”large” style=”text-align:center”;>*Let the public know
- Let the people or entities that the Agent previously interacted with know
- In cases of death; or Principal is otherwise not competent to contract; ALL authority is revoked</p>
<p class=”large” style=”text-align:center”;>What is an Agency Coupled with an Interest?</p>
<p class=”large” style=”text-align:center”;>Agent acquires an ownership interest in the Agency
Can only be terminated early (before the interest expiration date) by the Agent
Unless the Agency has a specific time limit spelled out in a contract; the Agent’s authority is irrevocable
by the Principal</p>
<p class=”large” style=”text-align:center”;>When is an employee an Agent; and when does this make the employer liable?</p>
<p class=”large” style=”text-align:center”;>Employees are agents while acting within the scope of their duties.
For employees who injure third parties while acting within the scope of their duties; both Employee and Employer are liable</p>
<p class=”large” style=”text-align:center”;>When are Agents liable for torts (civil wrongs) they commit?</p>
<p class=”large” style=”text-align:center”;>Agents are liable for torts (civil wrongs) committed whether they had authority or not</p>
<p class=”large” style=”text-align:center”;>Are Agents who act outside of their authority liable?</p>
<p class=”large” style=”text-align:center”;>Agents who act outside of their authority will be liable for the act
Exception – Principal ratifies the contract which relieves Agent of liability
In order to ratify; Principal must know all of the facts and must ratify before third party cancels agreement
If Principal keeps the benefits of the contract; ratification is implied
Contract must be 100% ratified or there is no contract
</p>
<p class=”large” style=”text-align:center”;>What is an Agent’s liability when acting for an undisclosed principle?</p>
<p class=”large” style=”text-align:center”;>*Agent liable to third party even if acting within authority
- Third party can sue both Principal and Agent if Principal becomes disclosed
- Agent can then sue Principal</p>
<p class=”large” style=”text-align:center”;>What are the requirements for a Power of Attorney (POA)?</p>
<p class=”large” style=”text-align:center”;>Must be in writing
Must be signed by person granting the POA
Ends upon death of Principal
General POA - Agent authorized to handle all affairs
Special POA - Agent authorized to handle only specific affairs </p>
