Chapter 14: Agency Flashcards
Who needs capacity in an agency relationship?
The principal needs capacity, the agent does NOT
What is the difference between an employee and an indepedent contractor?
An employee can be an agent for a company. Independent contracts cannot because the company cannot control the time and manner of their actions.
What is actual authority, apparent authority, and ratification?
Actual authority: Authority that the principal intends to give to the agent. Can be implied or express.
Apparent authority: Authority resulting from the principal taking an action that makes it seem like the agent has certain authority to third parties. Agent is liable to principal and principal is liable to the third party. Can get rid of this by giving notice to third parties.
Ratification: Giving authority to an action an agent took without authority after it has already happened. Must disclose to principal action, understand the contract, and ratify the action before the third party finds out.
What is a fully disclosed, partially disclosed, and undisclosed principal?
- Fully disclosed: Third party knows who principal is. Principal is liable.
- Partially disclosed: Third party knows agent is acting for another, but does not know identity. Both principal and agent are liable.
- Undisclosed: Third party thinks agent is acting for themselves. Agent does not have apparent authority and both the principal and agent can be held liable.
What are the three different types of agents?
General agents: Broad authority
Special agent: Single transaction or series of transaction authority
Sub-Agent: Agent appointed by another agent. Has duty to both principal and agent.
What are the ways agency can be terminated?
- Agreement
- Unilateral: Principal dismisses agent
- Operation of law: insanity, illegality, death, destruction of subject matter. Can terminate without notice.
What is actual notice versus constructive notice?
Actual notice means third parties are directly notified of the agency’s termination
Constructive notice is an announcement of the termination in publications third parties are likely to read
