CREATION OF AGENCY RELATIONSHIP Flashcards

1
Q

What is an agent?

A

An agent is a person or entity that acts on behalf of another (the principal)

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2
Q

Who is the person or entity that the agent acts on behalf of?

A

The principal

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3
Q

What type of relationship is agency?

A

a fiduciary relationship

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4
Q

How is an agency created?

A

Agency exist if there is (1) assent (2) benefit, and (3) control

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5
Q

What does assent mean?

A

Assent is the formal or informal agreement between the principal and the agent

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6
Q

What does the benefit element mean?

A

The benefit element means that the agent’s conduct on behalf of the principal primarily benefits the principal

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7
Q

What does the control element mean?

A

the control element means that the principal has the right to control the agent by being able to supervise the agent’s
performance

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8
Q

What degree of control is required to create an agency relationship?

A

the degree of control not need to be significant; an agency relationship exists if the elements above are met – even if the parties state otherwise

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9
Q

What are the 3 types of agency relationships?

A

the 3 types of agency are: (1) universal agent, (2) general agent, and (3) special agent

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9
Q

What is a universal agent?

A

A universal agent has broad authority to act on behalf of the principal, including performing all acts the principal is
allowed to perform

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10
Q

What is a general agent?

A

A general agent is one who has the authority to conduct a series of transactions over a period of time for a particular purpose,
business or operation

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11
Q

What is a special agent?

A

A special agent has limited authority (1) to conduct a specific act or transaction or (2) to conduct certain actions over a
specified period of time

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