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13 Cards in this Set
- Front
- Back
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What is Agency Law?
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Agency Law deals with someone's ability to bind you to a contract with a third party
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What is required for Agency to exist?
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Both parties must consent to the relationship and intend for an Agency relationship to exist Agent owes Principal fiduciary duty Principal doesn't owe Agent fiduciary duty A contract is NOT required and an Agency agreement is not based on Contract Law; Exception - If duties cannot be performed within a year; a signed writing is required
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What is Actual Authority in an agency?
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Actual Authority is what is expressly granted or is implied by the duties you expect the Agent to perform and is necessary to carry them out
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What is Implied Authority in an agency?
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When authority is expressly granted; it is implied that the agent has the authority to carry out the duties Does not include authority to sell or alter a business
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What is Apparent (Ostensible) Authority in an agency?
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Apparent Authority is based on the third party's perspective - they believe that the Agent has the authority to enter into a contract based on: *Prior dealings with agent *Agent's title leads the third party to believe they can enter into a contract *The Principal hires the Agent to carry out duties that normally carry with them the rights to enter into contracts
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How is an Agency terminated?
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*Both Agent and Principal agree to terminate *Principal fires Agent *Agent fires Principal *Agent breaches their contract by doing something like violating their obligation to act as a fiduciary to Principal
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How do you terminate Apparent Authority?
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*Let the public know *Let the people or entities that the Agent previously interacted with know *In cases of death; or Principal is otherwise not competent to contract; ALL authority is revoked
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What is an Agency Coupled with an Interest?
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Agent acquires an ownership interest in the Agency Can only be terminated early (before the interest expiration date) by the Agent Unless the Agency has a specific time limit spelled out in a contract; the Agent's authority is irrevocable by the Principal
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When is an employee an Agent; and when does this make the employer liable?
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Employees are agents while acting within the scope of their duties. For employees who injure third parties while acting within the scope of their duties; both Employee and Employer are liable
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When are Agents liable for torts (civil wrongs) they commit?
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Agents are liable for torts (civil wrongs) committed whether they had authority or not
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Are Agents who act outside of their authority liable?
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Agents who act outside of their authority will be liable for the act Exception - Principal ratifies the contract which relieves Agent of liability In order to ratify; Principal must know all of the facts and must ratify before third party cancels agreement If Principal keeps the benefits of the contract; ratification is implied Contract must be 100% ratified or there is no contract
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What is an Agent's liability when acting for an undisclosed principle?
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*Agent liable to third party even if acting within authority *Third party can sue both Principal and Agent if Principal becomes disclosed *Agent can then sue Principal
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What are the requirements for a Power of Attorney (POA)?
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Must be in writing Must be signed by person granting the POA Ends upon death of Principal General POA - Agent authorized to handle all affairs Special POA - Agent authorized to handle only specific affairs
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