MGMT 311 Exam 4 - FLASHCARDS - Chapter 19
Who is a person who has agreed to represent an act on behalf of another?
Agent
Who is the person whom the agent represents or acts on behalf of?
Principal
Who is a person who has a special duty created by his agreeing to act for the benefit of another?
Fiduciary
What are fiduciary relationships based on?
Trust and confidence. Both parties are supposed to be thinking about each other
All employees who deal with the third parties (the public) are ______ for a company?
Agents
What do agents do?
Deal with the public. Make decisions that effect the company. Liable for contract and tort issues
Are agents also known as employees?
Yes
What is the main reason contractors are not employees?
not employees because company that hired them does not control the details of their work
True or false: contractors are paid project by project, not hourly like an employee?
TRUE
What are questions we ask to determine employee status?
- How much control can the employer exercise over the details of the work? Right to control
- Is the worker engaged in an occupation or business distinct from that of the employer?
- Is the work usually done under the employer’s direction or by a specialist without supervision?
- Does the employer supply the tools at the place of work?
- For how long is the person employed?
- What is the method of payment – by time period or at completion of the job?
- What degree of skill is required of the worker?
What is a work for hire?
Work for hire means employer owns it. Employee is doing a work for hire
How are employees paid?
Paid by the hour
How are independent contractors paid?
Paid by the job. So, employers do not pull out employment taxes from pay checks to Independent Contractors.
Can employers pull out employment taxes from pay checks to Independent Contractors?
No
True or false: Independent contractors are exempt from overtime pay rules?
TRUE
True or false: Agency relationships are usually consentual?
TRUE
True or false: agency by agreement can be expressed or implied?
TRUE
What is an implied agency agreement?
legally binding, non-verbal, and unwritten agreement that is formed by the actions, conduct, or circumstances of the parties involved.
What is an expressed agreement?
agreement between two or more parties that explicitly states the terms of the contract, either orally or in writing.
What is an example of an expressed agreement?
A sale of real estate
What is agency by ratification?
principal accepts responsibility for agent’s UNauthorized actions
What is an example of agency by ratification?
Your daughter takes your credit card without asking and you accept it because she is your daughter
True or false: in an Agency by Ratification the Agent’s unauthorized acts are “ratified”?
TRUE
What is agency by estoppel?
Sometimes, a principal causes a third person to believe that another person is the principal’s agent, and the third person reasonably relies on that belief. When this occurs, the principal is “estopped to deny” (prevented from denying) the agency relationship.
What happens in agency by estoppel?
The principal is trying to deny that an agency relationship exists
True or false: In agency by estoppel, the principal’s action creates the appearance of an agency that does not actually exist?
TRUE
True or false: the court can apply the doctrine of agency by estoppel when a principal has given a third party reason to believe that an agent has authority to act?
TRUE
What is the difference between agency by ratification and agency by estoppel?
In agency by ratification, the principal is willing to accept an agency relationship, just the agent wasn’t given permission to do behavior. In agency by estoppel, the principal is trying to deny that an agency relationship exists
What is an example of agency by estoppel?
Juanita Alvarez is the owner of six Baja Tacos restaurants. Alvarez (the principal) strictly forbids the restaurant managers (agents) from entering into contracts to hire additional workers. Therefore, the fact that managers customarily would have authority to hire employees is immaterial.
What are duties of the agent to the principal?
Performance
Notification
Loyalty
Obedience
Accounting
What is also known as the duty to inform?
Duty of notification
What are duties of the principal to the agent?
Compensation
Reinbursement
Cooperation
Safe working conditions
What is agency by operation of law?
An agent is needed due to an emergency
True or false: In an Agency by Agreement, the Agent’s authority is either express or implied?
TRUE
Is express authority always written?
No. It can be written or oral
How is authority in express authority?
Authority is clear, direct and in definite terms
What rule tells us when the authority of an agent must be written?
Equal dignity rule
What is the equal dignity rule?
in most states IF the contract being executed is or must be in writing, then the agent’s authority must be in writing, too. Like the writing requirement under statute of frauds
What does an exception to the equal dignity rule mean?
an executive officer of a corporation can conduct business transactions without written authority
What are exceptions to the equal dignity rule where we don’t need the written authority of the agent?
1) Agent is an executive officer in a corporation when acting for the corporation in an ordinary business situation.
2) When the agent acts in the principal’s presence.
3) When agent’s act of signing is merely a formality.
Do we need the written authority of the agent if the agent acts in the principal’s presence?
No
Do we need the written authority of the agent if the agent is an executive officer in a corporation when acting for the corporation in an ordinary business situation?
No
Do we need the written authority of the agent if the agent’s act of signing is merely a formality (signing is not legally required)?
No
What gives an agent express authority?
Power of attorney
What is the best evidence of written express authority?
Power of attorney?
What is implied authority?
Authority that is created not by an explicit oral or written agreement but by implication or inference
In an agency by estoppel, the agent’s authority is what?
Apparent. A principal has given a third party reason to believe that an agent has authority to act.
What does it mean for an agent’s authority to be apparent?
Authority of the agent is not real
What is an example of apparent authority?
Bailey is a traveling salesperson. She solicits orders for goods but does not carry them with her. She normally would not have the implied authority to collect payments from customers on behalf of the principal. Suppose that she does accept payments from Corgley Enterprises, however, and submits them to the principal’s accounting department for processing. If the principal does nothing to stop Bailey from continuing this practice, a pattern develops over time, and the principal confers apparent authority on Bailey to accept payments from Corgley
What is it when Courts hold the Principal liable based on their actions over time?
Pattern of conduct
Is pattern of conduct based on agreement?
No
In an agency by operation of law, the agent’s authority is what?
the agent’s authority is emergency powers (to handle whatever that emergency is)
True or false: in agency by operation of law, the agent’s authority is limited to a specific emergency?
TRUE
What are civil wrongs other than breach of contract such as defamation, assault, and battery?
Torts
Can you still be sued if you are the tortfeasor and you are at work?
Yes
True or false: employers themselves can committ negligence in hiring or retaining workers?
TRUE
What is an employer liable for if they are sued for negligence?
They are being sued for negligence because they are liable for harm caused because they should have known a worker was dangerous or risky
What is an employer’s duty of due care in hiring workers?
Requiring them to do applications, background checks, interviews, contacting former employers
What was Harrison v. Tallahasee Furniture Co.?
hire Turner to be delivery man for them. Do not run background chack, look at references, past employment history. Hired him because someone said he was good. Turner delivers furniture to Mrs Harrison and assaults her in her home. She sues which goes back to Tallahasee Furniture for negligence
What is the doctrine of Respondent Superior?
the Employer is liable for any harm caused to a third party by an Employee committed by the Employee within the course and scope of employment.
What does the plaintiff have to prove about respondent superior?
- The employer is liable if the worker is an employee
- If the harm is committed is under the course and scope of employment
Is an employer liable for an employee causing harm to a third party within the course and scope of employment?
Yes
Is an employee traveling to and from work acting in course and scope of employment?
No
What is the coming and going rule?
employee traveling to and from work is NOT acting in course and scope of employment.
If an employee is coming from or going to work and has an accident, is the employer liable?
No, because the employee is not in the course and scope of employment
If an employee is on a special errand for their employer at time of accident, is the employer liable?
Yes, because the employee is in the course and scope of employment
What is the special errand exception?
if employee is on a special errand for employer at time of accident, employer IS liable.
What if an employee has an accident while on a special errand for their employer while going to or from work?
The employer is liable.
True or false: if the employee is running a personal arrand for their employer, from the moment the employee leaves their office to the moment they get home, that is all course and scope?
TRUE
True or false: both detours and frolics are a personal arrand for the employer?
TRUE
What is it called if an employee goes on a personal arrand for their employer, and are still mostly focused on business?
Detour
What is it called if an employee goes on an arrand for their employer and they are still considering the effects of their behavior on the employer?
Detour
What is it called if an employee goes on a personal arrand for their employer and they really are not considering the effects of their behavior on the employer?
Frolic
True or false: with a detour, the employee is outside the course and scope of employment?
FALSE
True or false: with a frolic, the employee is outside the course and scope of employment?
TRUE
If an employee is focused on the employer’s interests on his personal arrand, is he in the course and scope of employment?
Yes. He is on a detour, so he is in the course and scope of employment
If an employee is focused on his own private interests while on his arrand for his employer, is he in the course and scope of employment?
No. He is on a frolic, so he is not in the course and scope of employment
True or false: under the doctrine of respondent superior, the worker must be an employee?
TRUE
Is the person who hires an independent contractor liable if a third party is injured by the acts of the contractor in performing the contract?
No
What are exceptions where the person who hires an independent contractor is liable?
Right to Control
Inherently Dangerous (or Hazardous) Activities
Normally, does an employer have the right to control the details of an independent contractor’s performance?
No
If someone hires an independent contractor to do highly dangerous work with toxic or hazardous chemicals, are they liable if someone gets injured?
The person who hired the contractor is liable
True or false: if the agent does the crime, the agent does the time?
TRUE
