Chapter 10 Flashcards
actual authority
Authority given to an agent expressly or by implication
Agency
The service an agent performs on behalf of a principal
Agency agreement
An agreement creating an agency relationship between principal and agent
Agency by necessity
Consent to act as an agent that is implied when there is an urgent reason
Apparent authority
Authority as suggested to a third party by the conduct of a principal; may exist even when there is no actual authority
Authority
The right or power to act or to make a decision
Corporation
A business organization that is a separate legal entity from its owners, the shareholders
Delegation
Entrusting someone else to act in one’s place; an agent normally cannot delegate their responsibilities to someone else
Enduring power of attorney
The power to act as the donor’s trustee or representative following the donors lack of capacity
Equitable estoppel
The principle that when a gratuitous promise to do something in the future causes a person who relies on that promise to incur and expense, the promise will not be allowed to enforce other contractual rights that are inconsistent with that promise; the promise can only be used as a defence by the promisee
Estoppel
An equitable remedy that stops a party from trying to establish a position or deny something that, if allowed, would create an injustice
Express authority
The authority of the agent as actually stated by the principal
Firm
A partnership
Full disclosure
The obligation to reveal all relevant details of a transaction
General partner
A partner in a limited partnership whose liability is unlimited
Holding corporation
A corporation that owns shares in other corporations
Implied authority
When the authority of the agent is implied from surrounding circumstances such as the position or title given by the principal to the agent
Joint venture
The collaboration of several businesses, usually to complete a major project
Jointly liable
Under joint liability, all parties must be sued together; partners may face joint liability for debts of the firm
Limited liability partnership
A form of partnership in which only the partner responsible for the loss faces unlimited liability
Limited partner
A partner in a limited partnership whose liability is limited to the amount of their investment
Limited partnership
A partnership with general and limited partners
Non profit society
A separate legal entity with different procedures of incorporation and liabilities of its members from corporations
Partnership
When the ownership and responsibilities of a business are shared by two or more people with a view towards profit
Power of attorney
An agency agreement in writing and under seal
Principal
The person who authorizes an agent to represent them
Promissory estoppel
Same as equitable estoppel
Ratification
When the majority agrees with the terms of a collective bargain; when a principal confirms a contract entered into by their agent
Severally liable
Under several liability, each partner can be sued separately
Sole proprietorship
An individual carrying on business alone
Undisclosed principal
A principal whose identity is concealed from the third parties with whom the agent is dealing; the rights and obligations of the parties depend on wether the agent makes it clear that they are representing an undisclosed principal rather than operating on their own behalf
Unlimited liability
The liability of the sole proprietor or the partners for all debts incurred by the business to the extent of their personal resources
Utmost good faith
A duty to act in the best interests of another; such a duty may arise between directors and officers and the corporation they serve, between business associates including senior employees and their employer and between partners; also known as fiduciary duty
