Unit 7: Agency

Question 1

Agency

Answer 1

Most common form of biz relationship
Fiduciary duty (trust/confidence)

Question 2

Role of Agent

Answer 2

Fiduciary duty
Acts on behalf of principal in negotiation & transacting business w/3rd parties

Question 3

Types of Agency Relationships

Answer 3

Employer-Employee
Employer - Independent Contractor (IC)

Question 4

4 ways to create agency relationship

Answer 4

1. By agreement
2. By ratification
3. By estoppel
4. By Operation of Law

Question 5

Agency by agreement

Answer 5

most common
voluntary

Question 6

Agency by ratification

Answer 6

Person who is not an agent, makes a contract on behalf of the principal and the principal agrees to it

Question 7

Agency by Estoppel

Answer 7

Principal’s actions make a 3rd party believe another person is their agent

Question 8

Agency by operation of law

Answer 8

Court can file in absence of an agreement
Family relationship (ex husband/wife CC)
Emergency situation

Question 9

Agent’s Duty to the Principal

Answer 9

Performance: Do a decent job
Notification: Keep in the loop
Loyalty: Always working for principal
Obedience: Do what principal wants (lawfully)
Accounting: Keep clear records

Question 10

Principal’s Duty to the Agent

Answer 10

$$/compensation
Cooperation
Safe working conditions

Question 11

Indemnification

Answer 11

Law suit, agent sued b/c of principal - principal must pay

Question 12

Agent’s Authority

Answer 12

Principal is liable if agent has authority to enter into legally binding contracts

Question 13

Doctrine of Respondeat Superior

Answer 13

Agent and principal responsible for agent negligence

Question 14

Revocation

Answer 14

Principal terminates relationship

Question 15

Renunciation

Answer 15

Agent terminates relationship