Reg Agency 2008

Front 1

AGENCY

Back 1

-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

Front 2

PRINCIPAL

Back 2

-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

Front 3

AGENT

Back 3

-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

Front 4

TYPES OF AGENCIES

Back 4

employee (agent) -employer (principal)
independent contractor (agent) - company (principal)
sales rep (agent) - company (principal)
-employer is not liable for torts committed by independent contractor

Front 5

TYPES OF AUTHORITIES (agent's)

Back 5

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

Front 6

RATIFICATION

Back 6

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

Front 7

POWER OF ATTORNEY

Back 7

-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

Front 8

TYPES OF TERMINATION OF AGENCY

Back 8

-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

Front 9

AGENCY COUPLED WITH AN INTEREST

Back 9

-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

Front 10

TERMINATION OF AGENCY -

What is necessary to terminate APPARENT AUTHORITY?

Back 10

-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

Front 11

AGENT LIABILITIES

Back 11

-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)

Front 12

PRINCIPAL LIABILITIES

Back 12

-liable for torts committed by an agent within scope of agency

Front 13

TORT

Back 13

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

Front 14

PRINCIPAL LIABILITIES

Back 14

-liable for torts committed by an agent within scope of agency

Front 15

TORT

Back 15

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

Front 16

FULLY DISCLOSED PRINCIPAL

Back 16

-3rd party knows identity of principal
-principal is liable to 3rd parties
-agent is not liable to 3rd parties

Front 17

PARTIALLY DISCLOSED PRINCIPAL

Back 17

-3rd party knows agent is acting on behalf of another
-principal and agent are jointly and severally liable

Front 18

UNDISCLOSED PRINCIPAL

Back 18

-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