exam 4 power point chapter 28

Question 1

Agency

Answer 1

is a consensual relationship in which one person (the agent) acts as a representative of or otherwise acts on behalf of another person (the principal) with the power to affect the legal rights and duties of the principal.

Question 2

Principal is a

Answer 2

person who authorizes another to act on her behalf.

Question 3

Agent

Answer 3

person authorized to act on another’s behalf.

Question 4

Employment relationship

Answer 4

an employee is an agent of the employer

Question 5

All employees are agents

Answer 5

but not all agents are employees.

Question 6

Employees also partake

Answer 6

of the benefits that the employer provides- independent contractors don’t

Question 7

There is also the legal liability

Answer 7

for the torts committed by employees within the scope of employment

Question 8

There are major consequences for

Answer 8

the classification of a person as an employee or an independent contractor.

Question 9

Employers are tempted to

Answer 9

classify workers as independent contractors because they are cheaper.

Question 10

Jaeger v. Western

Answer 10

•Factors a court may consider in determining the nature of the relationship include •Whatever agreements exist concerning the right of direction and control over the employee whether express or implied•The right to hire and fire•The method o payment•The furnishing of the equipment•None of these factors separately is controlling.

Question 11

Status of those involved with a business include

Answer 11

•Partner•Employee•Independent contractor•Customer•Investor•Each status has legal consequences

Question 12

Creation of agency

Answer 12

Agency is a consensual relationship•It does not have to be paid•Gratuitous agency: an agency created without consideration.•Even if the agent is unpaid- the obligations to the principal don’t change.

Question 13

Formalities

Answer 13

Usually no particular formality is required in a contract of agency, although appointment of agents for a period of more than one year must be in writing (statute of frauds requirement).

Question 14

Power of attorney

Answer 14

Written, formal appointment of an agent who is known as an attorney in fact.

example
you are traveling and you want your friend to sell your car. You can give your friend a special power of attorney to sell the car.

Question 15

A general power of attorney allows

Answer 15

the friend to do almost everything that you can.

Question 16

Capacity

Answer 16

If the principal is a minor or an incomeptent not under a guardianship, his appointment of another to act as an agent is voidable, as are any resulting contracts with third parties.

Question 17

Duties of agent to principal

Answer 17

Duty of obedience•Duty of diligence•Duty to inform•Duty to account•Fiduciary duty

Question 18

Fiduciary duty

Answer 18

An agent owes a duty of utmost loyalty and good faith to the principal.•The agent has a duty to avoid conflict of interest and self dealing

Question 19

Conflict of interest

Answer 19

An agent has a duty not to deal with the principal as , or on behalf of, an adverse part in a transaction connected with the agency relationship.
An agent must act solely in the interest of his principal, not in his own interest or in the interest of another.•An agent may not represent his principal in any transaction in which the agent has a personal interest.

Question 20

An agent has a duty not to deal with the

Answer 20

principal as an adverse party in a transaction connected with the agency relationship.
•Full disclosure is required.•The transaction must be fair to the principal.•It’s best to avoid these situations. Have a third party involved. Get approval of the principal after full disclosure.

Question 21

During the agency relationship an agent must not compete

Answer 21

with his principal or act on behalf or otherwise assist any of the principal’s competitors.

Question 22

The agent may compete with his former principal unless there is a

Answer 22

covenant not to compete after the agency terminates

Question 23

Misappropriation

Answer 23

an agent may not use the property of the principal for the agent’s own purposes or for the benefit of a third party.

Question 24

Confidential information:

Answer 24

An agent may not disclose confidential information obtained in the course of the agency for her own benefit or the benefit of a third party.

Question 25

Duties of principal to agent

Answer 25

•Compensation (if agreed upon)•Reimbursement•Indemnification•Good faith

Question 26

Termination of agency

Answer 26

•Lapse of time•Renunciation by the agent•Death•Incapacity•Change in circumstances•Revocation of authority•Mutual agreement

Question 27

The durable power of attorney survives

Answer 27

disability unless it was revoked before the principal was became incapacitated.