BLAW Exam 4

Question 1

What is an agency?

Answer 1

Person 1 gives Person 2 legal authority to act on Person 1’s behalf when dealing with 3rd parties

Question 2

What is a principal?

Answer 2

Person 1, a person who has someone else acting on his or her behalf

Question 3

What is a agent?

Answer 3

Person 2, a person who is acting for someone else

Question 4

What do you need to create an agency relationship?

Answer 4

Consent: must be mutual
Control: agent controlled by principal
Fiduciary relationship: relationship of trust, act in best interest

Question 5

What do you not need for an agency?

Answer 5

Written Agreement: exception of equal dignities rule
Formal Agreement
Compensation

Question 6

What is the duty in agency law?

Answer 6

Its agent to principal and duty of loyalty

Question 7

What is outside benefits?

Answer 7

Agent can only receive profits if the principal allows it

Question 8

What is confidentiality?

Answer 8

duty to keep secrets

Question 9

What is competition?

Answer 9

Agent cannot compete with the principal

Question 10

What is conflict of interest?

Answer 10

Cannot act for more than one principal whose interests’ conflict

Question 11

What are secret dealings?

Answer 11

Agent must tell the principal if he is actually dealing with agent

Question 12

Who must obey instructions?

Answer 12

Agent must obey principal, unless it is unethical

Question 13

What is duty of reasonable care?

Answer 13

Special skills
Gratuitous agents

Question 14

What is the remedy of profits?

Answer 14

Agent must pay principal profits received through the breach

Question 15

What is the remedy of recession?

Answer 15

Principal may be able to rescind/cancel a contract made through the breach, they can’t represent you anymore

Question 16

What is the duty to compensate?

Answer 16

principal agreed to pay your agent

Question 17

What is the duty to indemnify/reimburse?

Answer 17

For tort claims by third party
For contract claims by third parties

Question 18

What is the duty to cooperate?

Answer 18

Allow opportunity to work
Can’t unreasonably interfere

Question 19

How does the principal-agent relationship terminate?

Answer 19

1.) Term Agency Agreement: certain period of time or purpose is achieved
2.) Agency at will: either party can terminate at any time
3.) Wrongful termination: may have to pay damages to the other party

Question 20

What is the principal’s contract liability to 3rd parties?

Answer 20

Agency had authority
Express authority, implied authority, apparent authority
Principal ratified the agents acts, subagents

Question 21

What is the Agent’s Contract Liability to 3rd parties?

Answer 21

1.) Fully Disclosed Principal: existence and identity of principal is known
2.) Unidentified Principal: existence of principal is known but identity pr principal is unknown