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From Commercial Law Notes > Ch. 33-34 > Flashcards

Ch. 33-34 Flashcards

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1
Q

What is an Agency?

A

Contractual relationship between Principal and Agent aimed at entering the Principal into a contract with a third party

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2
Q

Who are the parties?

A

Principal, Agent, and Third Party

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3
Q

What is a principal?

A

The party represented by another

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4
Q

What is an agent?

A

Person acting on behalf of the Principal

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5
Q

What is a third party?

A

Person the who enters into a contract with the principal

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6
Q

What is the effect?

A

Creates a fiduciary relationship between the principal and the agent requiring the agent to act primarily for the benefit of the principal

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7
Q

How are agencies classified?

A
  • Expressed
  • Implied
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8
Q

What do expressed agencies do?

A

they are stated orally or in writing for all to see

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9
Q

What do implied agencies do?

A

they are implied by the actions of the parties

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10
Q

What are the situations resulting in expressed agencies?

A
  • Power of attorney
  • Durable power of attorney
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11
Q

What is POA/ Durable POA?

A

Formal written document, signed by the principal, that grants power to the agent allowing them to bind the principal in contract to a third party.

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12
Q

Does a durable POA last beyond the capacity of the principal?

A

Yes

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13
Q

What situations result in implied agencies?

A
  • Estoppel
  • Ratification
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14
Q

What is estoppel?

A

Principal through their actions lead third party to believe that another individual serves as their agent although no formal agreement of Agency exist between Principal and purported Agent.

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15
Q

What are the elements of ratification?

A
  • the potential agent must misrepresent themself as agent for another party
  • potential principal has complete knowledge of all contractual terms including of all material facts
  • potential principal must accept the unauthorized act
  • potential principal must ratify agent’s act in its entirely
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15
Q

What is ratification?

A

Agent leads third party to believe they are agent for specific principal enters contract and principal accpets/ratifies the contract

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16
Q

Knowing this is a Fiduciary Relationship, does this relationship give rise to new obligations for
the Principal and the Agent?

A

Yes, they now have obligations to each other, but the obligations of each party are
different because their roles are different

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17
Q

What obligations does the principla have to the agent?

A

Compensation
Reimbursement and indemnification
Cooperation
Safe working conditions

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18
Q

What is indemnification?

A

compensation for harm or lost

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19
Q

What obligations does the agent have to the principal?

A

Loyalty
Notification
Performance
Obedience
Accounting

20
Q

What is an agency contract?

A

A contract between the agent and the principal

20
Q

When a party is found to be in breach of the Agency contract, what remedies are available to the non-breaching party if it’s the Principal?

A

Constructive trust
Avoidance
Indemnification

20
Q

Why can an agency contract be breached?

A

When parties fail to live up to their obligations imposed by the Agency contract.

21
Q

When a party is found to be in breach of the Agency contract, what remedies are available to the non-breaching party if it’s the Agent?

A

Tort and contract remedies
Demand for an accounting
Specific performance

22
Q

What is a target contract?

A

A contract between the principal and the third party

23
Q

When the Target Contract is signed by the agent, is the Principal now bound by the terms of the
Target Contract?

A

It depends on the Scope of Authority granted to the Agent in the Agency Contract and
whether or not the Agent acted within that Scope of Authority

24
Q

Who is liable for Target Contract liabilities when agent acts within scope of authority?

A

It depends on the classification of the Principal.

25
Q

What are the different classifications of the Principal?

A

Disclosed
Partially Disclosed
Undisclosed

26
Q

When the principal is disclosed, who is liable?

A

Principal liable, Agent not liable

27
Q

When the principal is undisclosed, who is liable?

A

Principal liable, Agent Liable

28
Q

When the principal is partially disclosed, who is liable?

A

Principal liable, Maybe Agent

29
Q

Who is liable for Target Contract liabilities when agent’s actions exceed their Scope of Authority?

A

It depends on what the 3rd party believed about the person with whom they were
negotiating.

30
Q

Did the 3rd party believe the agent was mistaken about Agent’s authority to negotiate the Target
Contract?

A

Agent not liable, Principal not liable

30
Q

What other liabilities may arise out the agency contract?

A

Tort liabilities

31
Q

Did the 3rd party reasonably believe the agent has authority to negotiate the Target Contract?

A

Agent liable, Principal not liable

32
Q

What is Tort?

A

A wrongful act committed against the 3rd party by the Agent that results in damages to
the 3rd Party’s property or person

33
Q

Who is liable for the damage to the 3rd party?

A

Agent is always liable because they committed the wrongful act

It depends for the prinicipal

34
Q

When is the principal liable for the damages done toe a third party?

A
  • Directs agent to commit tortious act
  • Fails to provide proper instruments, tools, or adequate instructions to Agent
  • Respondeat superior
  • Agent Misrepresentation
35
Q

What constitutes as respondeat superior?

A

Principal liable if Agent wrongfully injures third party
Negligently hired

36
Q

What is agent mispresentation?

A

Agent lies to 3rd party

37
Q

What about criminal responsibility?

A

If Agent commits crime, agent always liable for crime

37
Q

Is Principal Liable for crime?

A

Depends on whether or not Principal authorized the act

37
Q

What is an unauthorized act?

A

In scope of employment, principal not responsible for agent’s crime

38
Q

What is an authorized act?

A

Principal responsible for agent’s crime

39
Q

When does the agency contract terminate?

A

by acts of parties
by operation of law

40
Q

What is considered an act of parties?

A

Lapse of time
Fulfillment of purpose
Occurrence of specific event
Mutual agreement by parties
Revocation of authority
Renunciation by agent

41
Q

What is considered an operation of law?

A

Death
Insanity
Bankruptcy
Change in circumstances
Change in law
Impossibility of performance
Disloyalty of agent
War

42
Q

What type of relationship does one between an agent and independent contractor cover?

A

between the employee and employer

43
Q

Is the individual that hires the independent contractor liable for the independent contractors tortious actions under doctrine of respondeat superior?

A

No
Except for hazardous activities

From Commercial Law Notes (12 decks)

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