Business Law- Chapter 29

Question 1

Agency Law

Answer 1

The large body of common that governs agency; mixture of contract law and tort law.

Question 2

Agency

Answer 2

The principal-agent relationship; the fiduciary relationship “which results from the manifestation of consent by one person to another that the other shall act in his behalf and subject to his control, and consent by the other so to act.”

Question 3

Principal

Answer 3

A party who employs another person to act on his or her behalf.

Question 4

Agent

Answer 4

A party who agrees to act on behalf of another.

Question 5

Principal-Agent Relationship

Answer 5

A relationship formed when an employer hires an employee and gives that employee authority to act and enter into contracts on his or her behalf.

Question 6

Employer-employee Relationship

Answer 6

A relationship that results when an employer hires an employee to perform some task or service but the employee has not been authorized to enter into contracts on behalf of his employer

Question 7

Independent Contractor

Answer 7

A person or business that is not an employee but is employed by a principal to perform a certain task on behalf of the principal.

Question 8

Express Agency

Answer 8

An agency that occurs when a principal and an agent expressly agree to enter into an agency agreement with each other.

Question 9

Exclusive Agency Contract

Answer 9

A contract a principal and agent enter into that says the principal cannot employ any agent other than the exclusive agent.

Question 10

Power of Attorney

Answer 10

An express agency agreement that is often used to give an agent the power to sign legal documents on behalf of the principal.

Question 11

Implied Agency

Answer 11

An agency that occurs when a principal and an agent do not expressly create an agency, but it is inferred from the conduct of the parties.

Question 12

Agency by Ratification

Answer 12

An agency that occurs when 1. a person misrepresents himself as another’s agent when in fact he is not and 2. the purported principal ratifies the unauthorized act.

Question 13

Apparent Agency

Answer 13

Agency that arises when a principal creates the appearance of an agency that in actuality does not exist.

Question 14

Duty to Compensate

Answer 14

A duty that is principal owes to pay an agreed-upon amount to the agent either upon the completion of the agency or at some other mutually agreeable time.

Question 15

Duty to Perform

Answer 15

An agent’s duty to a principal that includes 1. performing the lawful duties expressed in the contract and 2. meeting the standards of reasonable care, skill, and diligence implicit in all contracts.

Question 16

Imputed Knowledge

Answer 16

Information that is learned by an agent that is attributed to the principal.

Question 17

Duty to Account

Answer 17

A duty that an agent owes to maintain an accurate accounting of all transactions undertaken on the principal’s behalf.

Question 18

Agency Coupled with and Interest

Answer 18

A special type of agency that is created for the agent’s benefit and that the principal cannot revoke.

Question 19

Wrongful Termination

Answer 19

The termination of an agency contract in violation of the terms of the agency contract. The nonbreaching party many recover damages from the breaching party.