Agency MEE Rules

Question 1

Agency/Fiduciary Relationship
Creation

Answer 1

An agency relationship arises when a PRINCIPAL APPOINTS another to ACT ON THE PRINCIPAL’s BEHALF as an AGENT, and the agent consents.

Both the principal and agent must consent to the relationship.

Question 2

Principal vs Agent Capacity to Create an Agency Relationship

Answer 2

A principal must have CONTRACTUAL CAPACITY.

A minor-principal’s appointment of an agent is VOIDABLE.
An incompetent principal’s appointment of an agent is VOID.

An agent needs only MINIMAL capacity.

Question 3

Writing Requirement for Agency (Equal Dignities Rules)

Answer 3

Generally, there is no requirement for an agent’s appointment to be in writing unless the AGENCY AGREEMENT FALLS WITHIN THE STATUTE OF FRAUDS (Equal Dignities Rule)

Question 4

Agent Duties

Answer 4

An agent is a FIDUCIARY OF ITS PRINCIPAL. An agent owes its principal the

DUTY OF LOYALTY-duty of UNDIVIDED loyalty to the principal

DUTY OF CARE- duty to carry out their agency with REASONABLE CARE

DUTY OF OBEDIENCE-duty to obey all REASONABLE DIRECTIONS of the principal

Question 5

Agent’s Duty of Loyalty

Answer 5

duty of UNDIVIDED loyalty to the principal

Question 6

Agent’s Duty of Care

Answer 6

duty to carry out their agency with REASONABLE CARE

Question 7

Agenty’s Duty of Obedience

Answer 7

duty to obey all REASONABLE DIRECTIONS of the principal