Exam 2 CHP 32,33,36 Flashcards
Refers to a person having a duty created by his or her undertaking to act primarily for another’s benefit in matters connected with the undertaking. Trust and confidence
Fiduciary
A person who contracts with another to do something for him but who is not controlled by the other nor subject to the other’s right to control with respect to his physical conduct in the performance of the undertaking.
Independent Contractor
Any copyrighted work created by an employee within the scope of her or his employment at the request of the employer.
Work-for-hire
True or false.
When an employer hires an independent contractor, any copyright created normally belongs to the employer.
False
An agency which is based on an express or implied agreement that the agent will act for the principal and the principal agrees to have the agent so act.
Agency by Agreement
An agency where a person who is in fact not an agent makes a contract on behalf of another. If the principal approves or affirms that contract by word or by action then the agency is….
Agency by Ratification
An agency where a principal causes a third person to believe that another person is the principal’s agent, and the third person acts to his or her detriment in reasonable reliance on that belief.
Agency by Estoppel
An agency relationship based on social or legal duty - such as the need to support family members or emergency situations when the agent is unable to reach the principal.
Agency by Operation of Law
What are the 5 duties of the agent?
- Performance
- Notification
- Loyalty
- Obedience
- Accounting
What are the 4 duties of the principal?
- Compensation
- Reimbursement and Indemnification
- Cooperation
- Safe Working Conditions
The agents duty to act solely for the benefit of his or her principle. Involves confidentiality.
Loyalty
The agent has a duty to follow all lawful and clearly stated instructions of the principal. May change during emergency situations.
Obedience
The agent must keep and make available to the principal of all property and funds received and paid out on the principals behalf.
Accounting
Whenever an agent disburses funds at the request of the principal or when the agent incurs liabilities because of authorized and lawful acts and transactions.
Reimbursement and Indemnification
A principal has a duty to assist the agent in performing his or her duties.
Cooperation
What are the agent’s 3 rights and remedies against the principal?
- Tort and Contract Remedies
- Demand for an Accounting
- No Right to Specific Performance
What are the principal’s 3 rights and remedies against the agent?
- Constructive Trust
- Avoidance
- Indemnification
When there is no contractual relationship between agent and principal, the agent isn’t forced to continue agency.
No Right to Specific Performance
Anything that an agent obtains by virtue of the employment or agency relationship belongs to the principal. The agent must hold it in a separate accounting or holding for the principal to pickup.
Constructive Trust
An authority declared in clear, direct, and definite terms. Orally or writing.
Express Authority
When the contract being executed is or must be in writing, then the agent’s authority must also be in writing.
Equal Dignity Rule
When an agent is conferred powerful express authority through written document and is notarized. May be special or general.
Power of Attorney
An agent has the ______ authority to do what is reasonably necessary to carry out express authority and accomplish the objectives of the agency.
Implied Authority
An agent has ____ authority when the principal, by either word or action, causes a third party to reasonably believe that the agent has authority to act, even though the agent doesn’t have express authority.
Apparent Authority
True or false.
The courts cannot apply agency by estoppel to apparent authority given by the principal.
False
True or false.
When an agent acts outside their scope of express, implied, or apparent authority, and the principal doesn’t ratify, the principal is still required to follow through the agents actions.
False
The principal must ratify an agents unauthorized acts for their to be a contract
A principal whose identity is known by the third party at the time the contract is made by the agent.
Disclosed Principal
A principal whose identity is not known by the third party. However, the third party knows that the agent is or may be acting for a principal at the time the contract is made.
Partially Disclosed Principal
When an agent believes he has the authority to enter into a contract on behalf of the principal, but the principal does not agree to ratify, preventing the principal from liability.
Implied Warranty
A semiautonomous software program that is capable of executing specific tasks, such as searching through databases and finding relevant information for the user.
E-agent
Latin for, “let the master respond”. A doctrine that makes the principal-employer liable for any harm caused to a third party by an agent-employee in the course or scope of employment.
Respondeat Superior
The employer is charged with knowledge of any dangerous conditions discovered by an employee and pertinent to the employment situation.
Notice of Dangerous Contidions
True or false.
An employer never has liabilities involving independent contractors, even when the activities are hazardous like poisonous gas, explosives, or chemicals.
False
The exception to liabilities pertaining to independent contractors are hazardous activities. Therefore, employers MAY be liable in these cases.
What are the 5 types of agency termination by operation of law?
- Death or insanity
- Impossibility
- Changed circumstances
- Bankruptcy
- War between countries
Which type of agency is irrevocable?
Agency coupled with an interest
What are the 6 requirements for all business forms?
- Business name registration
- Occupational licensing
- State tax registration
- Health and environment permits
- Zoning and building codes
- Import/export regulations
True or False.
Sole proprietors are flow-through tax payers, meaning company revenues and expenses flow to the owner (SP) to pay taxes on.
True
What happens to a SP company when the owner passes away?
The company dissolves
(Type of franchise) When a manufacturer licenses a dealer to sell its product.
Distributorship
(Type of franchise) When a franchise operates under a franchisor’s trade name and is identified as a member of a select group of dealers that engage in the franchisor’s business.
Chain-style Business Operation
In a manufacturing, or processing-plant, arrangement, the franchisor transmits to the franchisee the essential ingredients or formula to make a particular product. The franchisee then markets the product either at wholesale or at retail in accordance with the franchisor’s standards.
Manufacturing Arrangement
Requires franchisors to disclose certain material facts that a prospective franchisee needs in order to make an informed decision concerning the purchase of a franchise.
The Franchise Rule
May require ____ ____ to terminate the franchise, to prevent arbitration or bad faith termination.
Good cause
