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25 Cards in this Set

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What is a sole proprietorship?
Owner and manager are one in the same. Personal assets can be attacked when liable.
What is a partnership?
Two or more persons carrying on a business for profit. Owner and manager are one in the same.
What is the difference between Joint Ventures vs. Partnership?
Joint venture operates for a limited period of time, but in all purposes is the same as a partnership.
What is a corporation?
Formal, State created entity that has the legal status of a person. Management and ownership are almost completely separated. Corporations laws are mandatory.
What is agency?
an agreement by the principal that the agen shall act for him, with the understanding of the parties that the principal is to be in control. Consideration is not required. It can be gratuitous.
What is an agent?
A person who by mutual assent acts on behalf of another and is subject to the other's control.
What are the two types of agents?
General Agent
Special Agent
What is a general agent?
Conducts a serious of transactions involving continuity of service.
What is a special agent?
an agent authorized to conduct a single transaction or a series of transactions not involving continuity of service.
What is a fiduciary relationship?
a relationship of trust, putting the interest of another above your own.
What are the two types of Fiduciary Duties owed in an agency?
1. duty of loyalty
2. duty of care and skill
What is duty of loyalty?
an agent is subject to a duty to his principal to act solely for the benefit of the principal in all matters connected with his agency.
What is duty of care and skill in regards to Fiduciary duties owed in an agency?
The standard of care ans skill, which is standard in the locality for the kind of work which he is employed to perform and exercise any special skill that he has.
What is actual authority?
an agent has actual authority to act on a princpal's behalf if the princpal's works or conduct would lead a reasonable person in the agent's position to believe that the princpal authorized him to so act.
What is express authority?
manfiested by words or conduct interpreted by a reasonable person
What is implied authority?
Implied or inferred from works used, from past customs or from the relations of the parties.
What is incidental authority?
Incidental acts that are reasonable necessary to accomplish an authorized transaction or that usually accompany it.
What is apparent authority?
An agent has apparent authority to act on a principal's behalf in relation to the third party, if the words or conduct of the principal would lead a reasonable person in the third-party's position to believe the principal had authoriized the agent to so act.
What is inherent authority?
The principal is liable for an act done on his behalf by a general agent, even if the principal had forbidden the agent to do the act.
What are the two factors used to analyze if a principal will be liable for an act done on his behalf by a general agent?
1. The reasonable person in the principals' position would have forseen that, despite his instructions, there was a significant likelihood that the agent would act as he did
2. The third-party reasonably believes the agent is authorized to do the act.
What is authority by estoppel?
a person who is not otherwise liable as a party to a transaction purported to be done on his account, is nevertheless subject to liability to person who has changed their position because of the belief that the transaction was entered into by him.
What are the three elements to look at in regards to authority by estoppel?
1. Conduct by the person being estopped is justifiable
2. Detrimental reliance
3. Connection between the principal intentionally or carelessly caused such belief, and knowing of such belief, did not take reasonable steps to notify them of the facts.
What is ratification?
where an agent purported to act on the principal's behalf, though principal was not bound at the time, the principle will be bound if he, with knowledge of the material facts either:
1. affirmed the agents conduct
2. where the principal retains the benefits or proceeds of its business relations with an agent, with knowledge of the material facts, the principal is deemed to have ratified the methods employed by the agent in generating proceeds.
What is a joint venture?
Partnership that operates for a limited period of time
In relationtion the liability of an agent to a third party, is the party normally liable?
The agent is not normally liable normally unless
1. Agent does not have authority
2. Authorized or agreed to be liable.