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22 Cards in this Set
- Front
- Back
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Internal Affairs Doctrine |
choice of law rule that reqs that the law of the St of incorp should determine issues relating to internal corp affairs |
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When does the Internal Affairs Doctrine apply? |
applies to those matters which pertain to rel'p among/b/n corps & its officers, directors, & its s/h |
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McDermott Inc. |
switched form US to Panama--application of internal affairs doctrine is mandated by Const'l principles, & thus here applying DL corp law to D would violate commerce clause |
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How is agency reel's created? |
Rel'p arises when: (1) principal manifests assent to the agent that (2) the agent shall act on the principal's behalf & subject to principal's control, & (3) agent manifests assent or o/w consents to so act |
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How can manifestation be done for creation of agency reel's? |
written or spoken words or other conduct |
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Can nonEE agents qualify as agents? |
Yes, if they meet the three elems |
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Frawley |
bailbnds case--right to control was implicit. ER failed to show how a fair minded person couldn't conclude that ER in some manner indicated that EE could act on behalf of her |
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What is the Gen Rule on Principal being Bound to a K? |
principal is bound to a K made on principal's behalf by an agent if the agent acted w/ actual/apparent auth |
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What is actual auth? |
Agents act w/ actual auth when at the time of taking action that has legal conseq for the principal, the agent rsnbly believes, in accord w/ the principal's manif'n to the agent, that the principal wishes the agent so to act
Focus: comm by principal to agent & agent's rsnbl interpret'n of it |
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What is implied actual auth? |
Authority to do acts reasonably necessary or incidental to achieve the principal's express objective |
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What is apparent auth? |
(1) Power held by agent/other actor to affect a principal's legal relations w/ 3rd parties (2) when a 3rd party rsnbly believes the actor has auth to act on behalf of the principal & (3) the belief is traceable to the principal's manif'n
Focus: comm by principal & rsnbl interpret'n of it by 3rd party |
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H.H. Taylor |
1. Principal must take some affirm've action, which when rsnbly interpreted, caused 3rd party to believe that principal consents to have the apparent agent act for him 3rd party need not receive the info regarding principal's conduct directly from principal When a principal clothes an agent w/ actual auth to perform certain tasks, he might create an appearance
2. 3rd party must rely on that belief when dealing w/ agent |
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Restatement apparent auth |
Unlike H.H. Taylor, ReStmt doesn't have reliance elem: if 3rd party knows an agent is in part'r position & this knwldg is traceable to principal, agent has apparent to do what a person in the agent's position would customarily do |
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Apparent auth w/ imputed knwldg |
imputed knwldg is that orgs are treated as possessing the collective knwldg of their EEs & other agents--thus some1 who isn't an agent an still bind--i.e. when exEE was terminated by ER but never told 3rd party about it & 3rd party relied on that cuz exEE always K'd w/ them while EE'd by ER |
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What is estoppel? Restmt |
ER who hasn't made manif'n that an actor has auth as agent is subj to lab to 3rd party who is justif'ly induced to make a detrimental change in position b/c transaction is believed to be on ER's account, IF: (1) ER intentionally/carelessly caused such belief, OR (2) having notice of such belief & that it might induce others to change their positions, ER didn't take rsnbl steps to notify them of the facts |
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Unlike, apparent auth, estoppel doesn't req.... but does req.... |
doesn't req manic'n traceable to principal requires detrimental reliance by 3rd party |
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what is inherent agency power (restmt) |
power of an agent which is derived from the agency relation & exists for the protection of persons harmed by or dealing w/ a servant/agent |
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When does Ct invoke inherent agency power? |
when fairness dictates holding a principal liable on K even though agent lacked auth |
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Menard |
Facts: CEO accepted purchase but Board declined
Inherent agency power comes from expansive view of apparent auth--it indicates the power of an agent which is derived solely from agency relation & exists for the protection of persons harmed by or dealing w/ servant/agent
Rule: agent's inherent auth subjects principal to lab for acts done on principal's behalf if: (1) usually accompany or are incidental to transactions which the agent is auth'zed to conduct, although they're forbidden by principal; (2) the other party rsnbly believes that agent is auth'zed to do them [Ct looks to the agent's indirect/direct manif'n] & (3) has no notice that he is not so auth'zed. |
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Menhard--on suing the CEO instead |
Restmt: a person who purports to make a K, rep'n, or conveyance to or w/ a 3rd party on behalf of another person, lacking power to bind that person, gives an implied warranty of auth to the 3rd party & is subj to lab to 3rd party |
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What is ratification? (Restmt) |
the affirm'ce of a prior act done by another, whereby the act is given effect as if done by an agent acting w/ actual auth. |
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How does a person ratify? |
ratifies by: (1) manifesting assent to be bound by the act, OR (2) through conduct that justifies a rsnbl assumption that the person consents |
