R8 topics - Suretyship/Creditors, Agency Law, Employer/Employee Law Flashcards
When will a non-compensated surety become discharged from liability?
If principal debtor and creditor modify terms of contract in ANY way.
What is Subrogation (in suretyship?)
Right surety has by which surety succeeds to the creditor’s rights against the principal WHEN the surety pays the principal’s obligations.
EG - Subrogation is best method of collecting from debtor when debtor defaults, and surety pays creditor entire obligation
Composition of Creditors?
Agreement between a debtor and at least 2 CREDITORS that creditors will take less than full payment to discharge the debts owed by the debtor to the creditors who participate in the composition agreement.
What is a writ of attachment? Can it be used on someone with no real property?
“Seize Debtor’s Property”
Yes, because it also applies to personal property.
TO which creditors will so-called “Homestead Exemption” not apply?
Valid home mortgage lien, Valid IRS tax lien
Which bonds are obligations of surety?
Official Bonds
What is Contribution in co-suretyship?
The right of other (NON-BANKRUPT) Co-sureties to share in liability, on a pro-rata basis according to their maximum liabilities assigned per contract.
What is available to PRINCIPAL, when AGENT fraudulently breaches fiduciary duty?
- Termination of agency
- Constructive Trust – meaning, principal can recover secret profits earned by agent in double-dealing.
Does a principal need capacity? Does an Agent?
Principal - Yes
Agent - No… for this reason Minors may serve as agents
When is agency (with actual authority)Automatically terminated by operation of law?
(HINT - 6!)
1) DEATH of principal or agent
2) INCAPACITY of principal
3) DISCHARGE in bankruptcy, of principal
4) FAILURE to acquire a necessary license
5) DESTRUCTION of subj. matter of the agency
6) Subsequent Illegality of the agreement
Undisclosed Principals
Because the agent will never be acting with APPARENT authority for an undisclosed principal, ratification is not available. (note that this agent still might have actual authority).
Can create situation where Agent becomes liable on contracts with 3rd parties (3rd party election of whom to hold liable)
Agency oral agreements and agency Written agreements - when?
Writing generally NOT required, EVEN in cases when writing would be necessary under Statute of Frauds!
SERVICE CONTRACTS can be ORAL. (get it oral…service.. hehe)
Written Requirements:
- LAND contracts
- OVER ONE YEAR must be in writing
Upon termination, how much notice much principal issue?
a LOT. Notice placed in newspaper will be SUPERIOR to notification of existing customers.
Difference between actual notice (telling existing customers) and CONSTRUCTIVE NOTICE.
“Constructive notice is the legal fiction that signifies that a person or entity should have known, as a reasonable person would have, even if they have no actual knowledge of it. For example, if it is not possible to serve notice personally then a summons may be posted on a court house bulletin board or legally advertised in an approved newspaper.”
What is power of attorney?
A form of agency.
And like other types of agency, can be constrained to authority over specific transactions.
Most important factor when considering independent contractors?
Whether or not employer has right to CONTROL the manner in which [X] performs their work
Helps distinguish between Employees and Independent Contractors
