Ch 13/14 - Agency, Business Forms

Question 1

agency

Answer 1

relationship that exists when one party represents another party in the formation of legal relations

Question 2

agent

Answer 2

a person who is authorized to act on behalf of another

Question 3

principal

Answer 3

a person who has permitted another to act on her behalf

Question 4

outsider

Answer 4

the party with whom the agent does business on behalf of the principal

Question 5

law of agency

Answer 5

the law governing the relationship where one party, the agent, acts on behalf of another, the principal

Question 6

actual authority

Answer 6

the power of an agent that derives from either express or implied agreement

Question 7

apparent authority

Answer 7

the power that an agent appears to have to an outsider because of conduct or statements of the principal

Question 8

agency by estoppel

Answer 8

an agency relationship created when the principal acts such that third parties reasonably conclude that an agency relationship exists

Question 9

agency by ratification

Answer 9

an agency relationship created when one party adopts a contract entered into on his behalf by another who at the time acted without authority

Question 10

fiduciary duty

Answer 10

a duty imposed on a person who has a special relationship of trust with another

Question 11

fiduciary

Answer 11

a person who has a duty of good faith toward another because of their relationship

Question 12

insurance broker

Answer 12

one who provides advice and assistance to those acquiring insurance

Question 13

warranty of authority

Answer 13

a representation of authority by a person who purports to be an agent

Question 14

undisclosed principal

Answer 14

a principal whose identity is unknown to a third party who has no knowledge that the agent is acting in an agency capacity

Question 15

sole proprietorship

Answer 15

an unincorporated business organization that has only one owner

Question 16

unlimited liability

Answer 16

unrestricted legal responsibility for obligations

Question 17

partnership

Answer 17

a business carried on by two or more persons with the intention of making a profit

Question 18

joint liability

Answer 18

liability shared by two or more parties where each is personally liable for the full amount of the obligation

Question 19

joint and several liability

Answer 19

individual and collective liability for a debt. Each liable party is individually responsible for the entire debt as well as being collectively liable for the entire debt

Question 20

limited partnership

Answer 20

partnership in which the liability of some partners is limited to their capital contribution

Question 21

limited liability partnership (LLP)

Answer 21

partnership in which the partners have unlimited liability for their own malpractice but limited liability for other partners’ malpractice

Question 22

shareholder

Answer 22

a person who has an ownership interest in a corporation

Question 23

director

Answer 23

a person elected by shareholders to manage a corporation

Question 24

limited liability

Answer 24

responsible for obligations restricted to the amount of investment

Question 25

dividend

Answer 25

division of profits payable to shareholders

Question 26

franchise

Answer 26

an agreement whereby an owner of a trademark or trade name permits another to sell a product or service under that trademark or name

Question 27

joint venture

Answer 27

grouping of two or more businesses to undertake a particular project

Question 28

strategic alliance

Answer 28

an agreement whereby two or more businesses agree to cooperate for some purpose

Question 29

distributorship

Answer 29

a contractual relationship where one business agrees to sell another’s products

Question 30

sales agency

Answer 30

an agreement in which a manufacturer or distributor allows another to sell products on its behalf

Question 31

product licensing

Answer 31

an arrangement whereby the owner of a trademark or other proprietary right grants to another the right to manufacture or distribute products associated with the trademark or other proprietary rights