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18 Cards in this Set

  • Front
  • Back
AGENCY
-one party (agent) acts on behalf of the other (principal) for contractual obligations
-does not require a K
-does not need consideration
-need not be in writing EXCEPT - when Statute of Frauds applies:
-real estate, over 1 year
PRINCIPAL
-needs capacity
-does not have fiduciary duty to agent
-LIABLE whether or not undisclosed, partially or disclosed on K where agents have ACTUAL or APPARENT AUTHORITY, LIABLE where principal ratifies an agent's K
AGENT
-has fiduciary duty to act on behalf of principal
-must have sufficient mental & physical ability to carry out Principal's instructions
-can be a minor
-must have authority from the principal in order to act on the principal's behalf
-LIABLE to principal if agent has K with principal based on APPARENT AUTHORITY
TYPES OF AGENCIES
employee (agent) -employer (principal)
independent contractor (agent) - company (principal)
sales rep (agent) - company (principal)
-employer is not liable for torts committed by independent contractor
TYPES OF AUTHORITIES (agent's)
ACTUAL - principal gives agent actual authority to contract - can be EXPRESS OR IMPLIED

APPARENT - principal creates the impression to 3rd parties that agent has authority
-can only exist if there is a DISCLOSED OR PARTIALLY DISCLOSED PRINCIPAL
UNAUTHORIZED ACTION - not liable unless RATIFY
RATIFICATION
Principal gives agent authority
-an approval after the fact of an unauthorized act done by an agent or someone else acting like an agent
-principal must be FULLY DISCLOSED OR PARTIALLY DISCLOSED
-must know of details of K made by agent on principal's behalf
-must ratify before 3rd party --discovers that the agent acted without authority and withdraws
POWER OF ATTORNEY
-common form of agency
-written authorization for the agent to act on behalf of the principal for a specific or indefinite period of time
-written with specific provision keeping it enforceable - to act in certain matters or all matters
-also in the event of incapacity or insanity of principal
-terminated upon death of principal
TYPES OF TERMINATION OF AGENCY
-mutual AGREEMENT
-UNILATERAL - principal dismisses agent, or agent resigns - either party has power to terminate at any time
-OPERATION OF LAW - terminates without notice - death, insanity, illegality, principal bankrupt
-LOSS OR DESTRUCTION OF SUBJ MATTER which agency is based

EXCEPT - agency coupled with an interest
AGENCY COUPLED WITH AN INTEREST
-agent has some legal rights (property interest or security interest; sales commission is not an interest) to the subj matter of the agency
-agency cannot be terminated unilaterally by principal
TERMINATION OF AGENCY -

What is necessary to terminate APPARENT AUTHORITY?
-must give NOTICE TO 3RD PARTIES
ACTUAL NOTICE - each 3rd party is directly informed
CONSTRUCTIVE NOTICE - publications that 3rd parties read (who haven't dealt w/agent) -public notice
AGENT LIABILITIES
-always liable for any torts or criminal acts

-if agent enters K with 3rd party on behalf of undisclosed principal, agent is liable - also liable for performance of K
UNLESS
-3rd party discovers the id of principal & chooses to hold principal to the K (deep pockets)
PRINCIPAL LIABILITIES
-liable for torts committed by an agent within scope of agency
TORT
an act that that injures others but isn't done with evil intent (i.e. negligent driving)
- a crime is a tort in which scienter (evil intent) is present
PRINCIPAL LIABILITIES
-liable for torts committed by an agent within scope of agency
TORT
an act that that injures others but isn't done with evil intent (i.e. negligent driving)
- a crime is a tort in which scienter (evil intent) is present
FULLY DISCLOSED PRINCIPAL
-3rd party knows identity of principal
-principal is liable to 3rd parties
-agent is not liable to 3rd parties
PARTIALLY DISCLOSED PRINCIPAL
-3rd party knows agent is acting on behalf of another
-principal and agent are jointly and severally liable
UNDISCLOSED PRINCIPAL
-3rd party believes agent is acting for themselves only
-3rd party can hold either agent or undisclosed principal liable
-NOT LIABLE to 3rd party if agent acts outside the grant of ACTUAL AUTHORITY
-agent required to perform K
-agent CANNOT HAVE APPARENT AUTHORITY