Creation of Agency Flashcards
Agency
the legal relationship whereby one person, the principal, manifests assent that another person, the agent, shall act on her behalf and under her control, and the agent consents to so act.
Agency consists of three big things:
assent, benefit, and control.
In order to establish an agency, the principal must have ___________________.
contractual capacity
Must someone have contractual capacity to be an agent?
no
A _____________ must have contractual capacity, but an __________ need not.
principal; agent
How can an agent be disqualified?
by representing both parties or failing to get a necessary license.
Is consideration required to establish an agency?
no
Is a writing required to establish an agency?
generally, no. However, some states require certain kinds of agency relationships to be established by writing if they deal with transactions governed by the Statute of Frauds.
Generally, an agency can be created by what two methods?
acts of the parties or by operation of law.
How can an agency result by operation of law?
by estoppel or by statute.
Agency by Estoppel
where a third party relies on a principal’s communication that someone else is the principal’s agent, a court will hold that as an agency.
Agency by Statute
where a statute creates an agency, there is an agency.
Agents owe to their principals both _____________ and ___________ duties.
express contractual; fiduciary
What are the fiduciary duties owed by an agent to a principal?
loyalty, obedience to lawful instructions, reasonable care under the circumstances.
What kinds of actions can a principal bring against his agent?
contract actions, tort actions, actions for secret profits, equitable actions for accounting, and withholding of compensation for intentional torts or intentional breaches of fiduciary duties.
Subagent
a person appointed by an agent to perform functions that the agent has consented to perform on behalf of the agent’s principal.
Coagent
a person appointed by an agent as another agent of the principal.
Who is liable to the principal for breaches by a subagent?
the agent
An improperly appointed subagent owes duties to whom despite not being properly appointed?
the agent, but not the principal
If the agency agreement is silent to compensation, what result?
the agent is entitled to reasonable compensation.
Does a principal have a duty to compensate a subagent?
no
Can an agent who is compensated for his services sue the principal to enforce his contractual rights?
yes
What remedy does an agent have against their principal when the principal owes the agent money or compensation?
the agent can get a possessory lien placed on the property for any money due to them from the principal.
What are the two types of real estate broker contracts?
nonexclusive contracts and exclusive contracts.
