Reading...
Play button
Play button
Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
44 Cards in this Set
- Front
- Back
|
CREATION OF AGENCY:
Def of agency |
the legal relationship whereby an agent is authorized to represent a principal in business dealings with third parties
|
|
|
CREATION OF AGENCY:
capacity |
principal must have contractual capacity
agent needs only minimal capacity (just cannot have no mental capacity) an agent may be qualified for representing both parties or failing to have a required license |
|
|
CREATION OF AGENCY:
formalities |
consent of both parities is required
consideration is not required generally no writing is required, but many states require a writing when the contract the agent is to enter into with a third party is within certain provisions of the statue of frauds, most notably land transactions |
|
|
CREATION OF AGENCY:
modes of creating agency relationship |
a. by acts of parties - agreement, holding out by principal or ratification
b. operation of law 1) estoppel - an agency may be created through estoppel - reliance on the principals communication (apparent authority). 2) statute - ex. secretary of state authorized to accept service |
|
|
RIGHTS AND DUTIES BETWEEN PRINCIPAL AND AGENT:
Agent's duties |
in addition to any express contractual duties that the agent owes the principal, agent owes duties of loyalty, obedience to reasonable directions, and reasonable care under the circumstances (including duty to disclose all relevant information)
|
|
|
RIGHTS AND DUTIES BETWEEN PRINCIPAL AND AGENT:
principal's remedies |
include contract actions, tort actions, actions for scret profits, equitable actions for an accounting, and withholding of compensation for intentional torts or intentional breaches of fiduciary duty.
the principal may recover the actual profits or properties held by the agent whether or not the agents profit has caused principal any loss |
|
|
RIGHTS AND DUTIES BETWEEN PRINCIPAL AND AGENT:
subagents |
agent has absolute liability to principal for breaches by subagent
if appointed with proper authority the subagent owes the principal the same duties as the agent. if subagent is unauthorized he owes no duties to principal but does owe duties to the agent |
|
|
RIGHTS AND DUTIES BETWEEN PRINCIPAL AND AGENT:
Principal's duties |
the principal owes the agent all of the duties imposed by their contract, reasonable compenation and reimbursement for expenses. the principal also generally should cooperate with the agent and not unreasonable interfere with the agent's performance
reasonable compensation is default and Principal does not owe subagent compensation |
|
|
RIGHTS AND DUTIES BETWEEN PRINCIPAL AND AGENT:
agent remedies |
a compensated agent has the usual contract remedies against the principal but has a duty to mitigate damage. also an agent has the right to a prossessory lien for any money due form the principal including compensation owed for services
|
|
|
RIGHTS AND DUTIES BETWEEN PRINCIPAL AND AGENT:
Real Estate Brokers' Contracts |
a. Nonexclusive contracts - generally entitle the agent to compensation upon his production of a ready, willing, and able buyer, even through the sale is not consummated
b. exclusive contracts - broker to gets his commission if anyone produces a ready willing, and able buyer |
|
|
ACTUAL AND APPARENT AUTHORITY:
Generally |
when deciding whether a principal will be bound on an agent's contract, it should first be determined whether the agent had actual authority. if not look to sew whether apparent authority was present.
|
|
|
ACTUAL AND APPARENT AUTHORITY:
actual authority: definition |
authority that the agent reasonably believes they possesses based on the principals dealings with them. either expressed or implied
|
|
|
ACTUAL AND APPARENT AUTHORITY:
actual authority: expressed |
authority that is actually contained within the four corners of the agency agreement, it is effective even if it was granted mistakenly or because of misrepresentation
|
|
|
ACTUAL AND APPARENT AUTHORITY:
actual authority: implied |
authority the agent reasonable believes she has as a result of the principal's actions. it includes:
1) incidental to express authority 2) arising out of customs known to the agent 3) resulting from prior acquiescence by the principal 4) to take emergency measures 5) to delegate authority in cases of ministerial acts, where circumstance require, where performance is impossible without delegation, or where delegation is customary 6) to pay for and accept deliver of goods where there is authority to purchase 7) to give general warranties as to fitness and quality and grant customary covenants in land sales, collect payment and deliver where there is authority to sell 8) to manage investments in accordance with the prudent investor standard |
|
|
ACTUAL AND APPARENT AUTHORITY:
actual authority: termination of actual authority |
1) lapse of specified or reasonable time
2) the happening of a specified event 3) a change in circumstances, including destruction of the subject matter of the authority, insolvency of the agent or principal and a change in the law or business conditions 4) agent's breach of fiduciary duty 5) either party's unilateral termination 6) operation of law (death or loss of capacity of either party except where a durable power of attorney - written authority that says it will not terminate on principals disability is present) |
|
|
ACTUAL AND APPARENT AUTHORITY:
actual authority: irrevocable agencies |
nether an agency coupled with an interest nor a power given as security may be unilaterally terminated by the principal if the agency w as given to protect the agent (or third party's rights) and is support by consideration.
niether will such agencies be terminated by operation of law |
|
|
ACTUAL AND APPARENT AUTHORITY:
apparent authority: generally |
arises form reasonable beliefs of third parties. look to actions between principal and third party.
if a principal directly or indirectly holds out another a s possessing certain authority, thereby inducing reasonable reliance by others on that authority, the person so held out has apparent authority even through as between himself and the principal such authority has not been granted |
|
|
ACTUAL AND APPARENT AUTHORITY:
apparent authority: imposters |
where the principal negligently permits an impostor to be in a position to appear to have agency authority, the principle will be held liable for the impostor's actions undertaken with such authority
|
|
|
ACTUAL AND APPARENT AUTHORITY:
apparent authority: lingering apparent authority |
1) notice of termination of actual authority- where an agents actual authority has terminated he will have apparent authority to act as to all third parties with whom the principal knows he dealt unless and until the third party receive either actual or constructive notice of termination
2) where an agents actual authority has been terminated but third party rely on a written authority of the agent, the agent's apparent authrity is not considered terminated 3) death or incompentancy - death or incompenatny of the principal terminates all authority without notice to either the agent or third party |
|
|
ACTUAL AND APPARENT AUTHORITY:
apparent authority: agent exceeds actual authority |
a) prior act where the prinicpal previously permitted th agent to exceed his outhority and know that the third party is aware of this the pricipal is bount by the unauthorized act
b) position - where the agent is in a position that customarily carries with it certain responsibilities the principal is liable for the agents acts that come within these customary responsibilities - general agents has broader authority then specilized |
|
|
ACTUAL AND APPARENT AUTHORITY:
apparent authority: inherent authoirty |
principal is bound even when agent has no actual authority
a) respondeat superior b) conduct similar to that authorized |
|
|
ACTUAL AND APPARENT AUTHORITY:
apparent authority: improper disposition of goods |
the principal will be held liable for the disposition of her goods by an agent possessing them if the agent was given some indicia of ownership, or if the goods disposed of were sold by an agent who is a dealer in the particular goods
|
|
|
RATIFICATION:
effect of ratification |
an agency relationship is created by ratification when an agent purports to act on behalf of a principal without any authority at all but the principal subsequently validates the acts and becomes bound
|
|
|
RATIFICATION:
prerequisites of ratification |
the principal must
1) know or have reason to know all material facts 2) accept the entire transaction 3) and have capacity requires no consideration |
|
|
RATIFICATION:
method of raftifying |
may be expressed or impiled through the conduct of the principal such conduct would include acceptance of the transaction's benefits, silence if there is a duty to disaffirm and suing on the transaction
|
|
|
RATIFICATION:
what and by whom |
a principal may ratify anything they could legally do, unless preformance was illegal at the time of ratification, the third party has withdraw, or there has been a material change circumstance. only a disclosed or partially disclosed principal may ratify. an agent may not treat the contact as his own
|
|
|
LIABILITIES OF THE PARTIES:
Third party v. principal |
the principal will be liable to the third party on a contact entered into by her agent if the agent had valid authority to act
|
|
|
LIABILITIES OF THE PARTIES:
Third party v. agent: disclosed prinicpal |
a disclosed principal is always liable on the contract and the agent generally is not liable
exception: an agent is liable if the parties to the contract intended the agent to be liable, and than agent may be liable to the third party under his implied warranty that a principal with contractual capacity exists and he the agent had authoirty |
|
|
LIABILITIES OF THE PARTIES:
Third party v. agent: partiall disclosed and undisclosed prinicpal |
results in liability for both the principle and the agent. the majority of courts permit a third party to file suit against both the principal and agent but upon objection of either defendant the third party must elect prior tot judgement which party he wishes to hold liable.
if the third party obtains a judgment against the agent without knowledge of the principals identity he can later sue the principal when her identity is discovered if the judgement has not been saftied |
|
|
LIABILITIES OF THE PARTIES:
third party liability to principal an agent: disclosed principal situations |
only the principal not the agent may enforce the contract and hold the third party liable
|
|
|
LIABILITIES OF THE PARTIES:
third party liability to principal an agent: partially disclosed or undiscolsed principal situations |
either the principal or getn may enforce the contract and hold the thrid party laible
when its the agent the principal is entitled to all his rights under the contract principal may not enforce the contract if there has been an affirmative fraudulent misrepresentation of the principals identity or if there is an unenforceable increased burden to the third party due to the fact that performance is due to the principal and not the agent |
|
|
TORT LIABILITY- RESPONDEAT SUPERIOR
General |
imputes joint and several liablity to the empoyer-principal for torts committed by the employee/agent within the scope of the employee's employment. the derivative nature of this liability means that if the employee is not liable the employer generally cannot be liable however person defenses of the employee not going to liability don var recover om the employer
employer may also be liable for negligent hiring or supervising which would be its own tort |
|
|
TORT LIABILITY- RESPONDEAT SUPERIOR
independent contractor or employee: generally |
a principal is liable only for torts committed by agents who are employees not tor torts of agents acting as independent contractors
|
|
|
TORT LIABILITY- RESPONDEAT SUPERIOR
independent contractor or employee: right to control |
the dertermative distinction between the independent contractor and the employee is that with the independent contractor the principal has no right to control the manner an method in which the job is performed, while with the employee the principal does excersie such control
|
|
|
TORT LIABILITY- RESPONDEAT SUPERIOR
independent contractor or employee: right to control factors |
1) characterization by the parties
2) whether the business is distinct 3) the customs of the locality regarding supervision of work 4) the degree of skill required on the job 5) whose tools or facilities are used 6) what the period of employment is 7) what the basis of compensation 8) what the understanding of the parties is 9) whether the person was hired to further the principal business |
|
|
TORT LIABILITY- RESPONDEAT SUPERIOR
liability for acts of subservants |
liablity also applies to duly authorized subservants. authorization to hire subservants can be express or implied
|
|
|
TORT LIABILITY- RESPONDEAT SUPERIOR
employer-employee by estoppel |
where a principal creates the appearance of an employer-employee relationship upon which a third party relies, that principal will be estopped from denying the relationship and will be liable under the doctrine
|
|
|
TORT LIABILITY- RESPONDEAT SUPERIOR
liability for acts of borrowed employees |
the original employer will normally be liable for the toritous acts of a loaned employee. however the key issue in determining liability for the loaned employee's torts is whether the borrowing principal or the loaning principle has the primary right to control the employee's actions
|
|
|
TORT LIABILITY- RESPONDEAT SUPERIOR
liability for independent contractors |
a principal will incur direct liability for the acts of an independent contraction where
1) inherently dangerous activities are involved 2) nondelegable duties have been delegated 3) the principal knowingly select an incompetent indepenent contractior |
|
|
TORT LIABILITY- RESPONDEAT SUPERIOR
Scope of employment: general nature of job |
if the nature of the employees conduct is similar or incidental to that which was authorized the conduct is probably within the scope of employment
can be strictly prohibited but criminal conduct is not |
|
|
TORT LIABILITY- RESPONDEAT SUPERIOR
Scope of employment: frolic vs. detour |
a detour: small deviation form the employer's direction is within the scope of employment
a frolic: major deviation requiring a substantial departure from employment is beyond the scope once left employment must show employee returned before SOE |
|
|
TORT LIABILITY- RESPONDEAT SUPERIOR
Scope of employment: Motivation to serve the employer |
a. passengers: the employees invitation to passengers unless expressly authorized is generally held to be outside SOE
b. unauthorized instrumentalities: the employer is not liable for torts caused by the use of substantially different instrumentalities from those authorized c. trips with two purpose: if an employee makes a trip with two purposed wt will be within the scope if any substantial purpose of the employer is being served |
|
|
TORT LIABILITY- RESPONDEAT SUPERIOR
Scope of employment: intentional torts |
are not normally within the scope unless
1) a natural incident of the employees duties (as where forced is authorized); 2) where the employee is promoting the employer's business; or 3) where the nature of the work gives rise to hostilities liable for misrpreentations if agent has authority to make statements concerning subject matter |
|
|
TORT LIABILITY- RESPONDEAT SUPERIOR
Scope of employment: ratification |
an employer may ratify an employee's torts if the normal requisites of ratification are met
|
