• Shuffle
    Toggle On
    Toggle Off
  • Alphabetize
    Toggle On
    Toggle Off
  • Front First
    Toggle On
    Toggle Off
  • Both Sides
    Toggle On
    Toggle Off
  • Read
    Toggle On
    Toggle Off
Reading...
Front

Card Range To Study

through

image

Play button

image

Play button

image

Progress

1/7

Click to flip

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;

7 Cards in this Set

  • Front
  • Back

Agency

It is a fiduciary relationship – agent must act with the utmost trust, loyalty and good faith. The agent must not have any conflicts of interest and may not disclose confidential information unless the principal consents.

Principal

person who employs another to act on his behalf


Who may be a principal? Any person who has legal capacity to enter into a contract may be a principal.


Thus, minor and mentally incompetent persons cannot be principals. The agency would be voidable by the principal in these cases.

Agent

Acts on behalf of the principal.An agency may be created for any lawful purpose.


Who may be an agent? Any person who has legal capacity and even minors and incompetents. Still effective against third parties although the agency contract itself is voidable by the agent.

Duties Agent owes principal

1: Performance – must perform duties in contract and do so with reasonable care.


2: Notification – must notify principal of important information learned from third parties.


3: Loyalty – to do nothing that adversely affects the principal’s interests.


4: Obedience – Follow the lawful instructions of the principal.


5: Accountability – Keep accurate records of all revenues and expenses and be prepared to submit to principal upon his request.

Duties principal owes Agent

1: Compensation – Pay agent for services provided.


2: Reimbursement – for expenses that were – a) authorized by the principal, b) within the scope of the agency, c) necessary for the agent to carry out his duties.


3: Indemnification – for any losses that the agent suffered due to the principal.


4: Cooperation – to assist and help the agent – not to interfere.

Termination of an agency

1:Mutual agreement.


2: Lapse of time – whether stated or reasonable. 3: Purpose achieved/Occurrence of a specific event.


4: Operation of Law


-Death of either party.


-Insanity of either party.


-Bankruptcy of principal.


-Impossibility.

Notice of termination

1: Persons with whom the agent has represented the principal must receive actual notice.


1: All other persons must be notified constructively – generally through a public announcement – such as a newspaper advertisement.