Chapter 5 Agency Flashcards
actual authority
The express or implied power of an agent to act for and bind a principal to agreements entered into by an agent.
agency
A relationship in which one person (the agent) acts for or represents another person (the principal).
agency by estoppel
When the principal leads a third party to believe that a person is his or her agent, the principal is estopped (prevented) from denying that the person is his or her agent.
agency by ratification
An agency formed when a principal approves or accepts the benefits of the actions of an otherwise unauthorized agent.
agent
A person who manages a task delegated by another (the principal) and exercises whatever discretion is given to the agent by the principal.
aided-in-the-agency relation theory
An employee is aided in accomplishing a tort by the existence of the agency relationship.
apparent authority
A principal, by words or actions, causes a third party to reasonably believe that an agent has authority to act for or bind the principal.
click-wrap agreement
A prominent feature of electronic commerce whereby users assent by clicking on an acceptance box.
customary authority
The authority that agents of that type would normally have.
direct representation
Rules that apply for an agent acting in
the name of a principal pursuant to express, implied, or apparent authority, whether or not the principal’s identity is revealed at the time the agent acts or is to be revealed later.
duty of care
The fiduciary duty of agents, officers, and directors
to act with the same care that a reasonably prudent person would exercise under similar circumstances. Sometimes expressed as the duty to use the same level of care a reasonably prudent person would use in the conduct of his or her own affairs.
duty of loyalty
The fiduciary duty of agents, officers, and directors to act in good faith and in what they believe to be the best interest of the principal or the corporation.
duty of obedience
The fiduciary duty of agents, officers, and directors to obey all reasonable orders of his or her principal.
electronic agents
Autonomous computer programs that can be dispatched by the user to execute certain tasks.
equal dignities rule
Under this rule if an agent acts on behalf of another (its principal) in signing an agreement of the type that must under the statute of frauds be in writing, the authority of the agent to act on behalf of the principal must also be in writing.
express authority
The power of an agent to act for a principal based on that agent’s justifiable belief that the principal has authorized him or her to do so; may be given by the principal’s actual words or by an action that indicates the principal’s consent.
express ratification
Express ratification occurs when the principal, through words or behavior, manifests an intent to be bound by the agent’s act.
fiduciary
A person having a duty to act primarily for the benefit of another in matters connected with undertaking fiduciary responsibilities.
fiduciary duty
The obligation of a trustee or other fiduciary to act for the benefit of the other party.
implied authority
The power of an agent to do whatever is reasonable to complete the task he or she has been instructed to undertake.
implied ratification
Implied ratification occurs when the principal, by his or her silence or failure to repudiate the agent’s act, acquiesces in it.
independent contractor
A person is deemed to be an independent contractor only if the employer neither exercises control over the means of performing the work nor the end result of that work.
indirect representation
Rules that apply when an intermediary acts on instructions and on behalf of, but not in the name of, a principal, or when the third party does not know or have reason to know that the intermediary is acting as an agent.
principal
A person who delegates a portion of his or her tasks to another person who represents the principal as an agent.
ratification
A principal affirms through words or actions a prior act of an agent that did not bind the principal.
respondeat superior
(let the master answer) The doctrine under which an employer may be held vicariously or secondarily liable for the negligent or intentional conduct of the employee that is committed in the scope of the employee’s employment.
undisclosed principal
Use of an agent so that the third party to an agreement does not know or have reason to know of a principal’s identity or existence.
usual authority
The authority that the agent has been allowed to exercise in the past.
vicarious liability
The imposition of civil or criminal liability on one party (e.g., an employer) for the wrongful acts of another (e.g., an employee). Also called imputed liability.
