General Principals

Question 1

Every agency relationship has

Who are the parties?

Answer 1

A principal and agent

Question 2

Is consideration required for an agency relationship?

Answer 2

No

Question 3

For an Agency relationship to exist, what three things must there be?

Answer 3

1) Assent
2) Benfit
3) Control

Question 4

Define

Assent

Answer 4

Assent requires btoh parties manifest assent to work with one another

Question 5

When one party disclaims assent to where do the courts look?

Answer 5

look to the creation of the agency relationship for manifestations of assent

Question 6

Define

Benefit

Answer 6

the agent agrees to work for the principals benefit

Question 7

Define

Control

Answer 7

the agent agrees to work subject to the control of the principal

Question 8

Who can be a Principal

Answer 8

Any person or entity that has legal capacity

This excludes:
1) minors
2) incapacitated or intoxicated people

Question 9

Who has capacity to be an agent?

Answer 9

any person or entity who has minimal capacity

Question 10

Define

Minimanl capacity

Answer 10

to have minimal capacity the agent must:
1) assent to agency relationship
2) perform the tasks on the behalf of the principal, and
3) be subject to the principals control

Question 11

Are employees and independent contractors agents?

Answer 11

Employees can be agents because the employer has the right to control the agent’s physical conduct of work

An independent contrator is generally not an agent because a principal does not have control over the agent’s physical conduct of work.

Question 12

If there is question regarding whether someone is an independent contractor or an employee, what are some considerations of the Court?

Answer 12

Whether the person has characteristics of an independent contractor such as
1) mainting high level of independence
2) free to work for others
3) fixed fee
4) typically the owner of their tools.

Question 13

When can an Agency Relationship be terminated?

Answer 13

either party may terminate an agency relationship unilaterally.

Question 14

What fidiuciary duties are owed by the Agent to the Principal?

Answer 14

1) duty to excerise reasonable care
2) duty of loyalty
3) duty to obey reasonable instructions

Question 15

What is encompassed in the duty of loyalty?

Answer 15

1) agent cannot usurp a business oppurtunity
2) agent cannot take in secret profits
3) agent cannot compete in a competeing business w principal

Question 16

What are the four kinds of legal authority?

Answer 16

Express, Implied, Apparent, and Ratification

Question 17

Define

Express authority

Answer 17

Principal creates acutal express authority through words

Look at communciation between agent and principal

Question 18

What is the requisit intent for express authority?

Answer 18

Subjective Intent: Agent must believe that he is doing want the Principal wants him to do.
Objective Intent: Belief must also be reasonable

Question 19

Does express authority terminate by death?

Answer 19

Upon death of the Principal, express authority terminates when the agent has knowledge of P’s death

Upon death of the Agent express authority immediately terminates.

Question 20

Define

Implies Authority

Answer 20

Principal creates implied authority by using words, written or spoken, or other conduct to convey authority to the agent to take whatever steps are necessary to acheive the P’s objectives

Look to communication between A and P

Question 21

Once an Agent has implied authority, it what manner may the Agent act?

Answer 21

within the accepted business custom or general trade

Question 22

Define

Apparent Authority

Answer 22

Principal creates apparent authority by written or spoken words that cause the third party to reasonably believe that the P consents to have acts done on the Ps behalf by the agent

Look at communication between P and 3rd party
Ask: Is the 3rd parties belief reasonable? Have they had similar dealings?

Question 23

When does a P ratify A’s actions?

Answer 23

Ratification requires that
1) P has knowledge of the material terms of the contract, and
2) the P then accepts the benefits of the contract

Question 24

If a principal is disclosed to a 3rd party