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61 Cards in this Set
- Front
- Back
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Principal |
A person who has someone else acting for him |
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Agent |
A person who acts for someone else |
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fiduciary relationship |
a trustee acts for the benefits of the beneficiary, always putting the interests of the beneficiary before his own. The beneficiary places special confidence in the fiduciary who, in turn, is obligated to act in good faith and candor, putting his own needs second. |
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equal dignities rule |
if an agent is empowered to enter into a contract that must be in writing, then the appointment of the agent must also be written |
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duty of loyalty |
an agent has a fiduciary duty to act loyally for the principal's benefit in all matters connected with the agency relationship |
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duty of loyalty components |
-outside benefits -confidential information -competition with the principal -conflict of interest between two principals -secretly dealing with the principal -appropriate behavior |
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Other duties of an agent |
-duty to obey instructions -duty of care -duty to provide information |
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Principles Remedies when the Agent breaches a duty |
-recover damages from the agent -turn over to the principle any profits -rescind transactions with the agent |
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Duties of principals to agents |
-duty to compensate as provided by the agreement -duty to reimburse for reasonable expenses -duty to cooperate |
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Ways to terminate an agency relationship |
-termination by agent or principal -principal or agent can no longer perform required duties -change in circumstances |
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The principal is liable for the acts of an agent if- |
-the agent had authority -the principal ratifies the acts of the agent |
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Express authority |
words or conduct that reasonably interpreted cause the agent to believe the principal desires her to act on the principal's account |
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Implied authority |
unless otherwise agreed, authority to conduct a transaction includes authority to do acts that are reasonably necessary to accomplish it |
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apparent authority |
a principal can be liable for the acts of an agent who is not, in fact, acting with authority if the principal's conduct causes a third party reasonable to believe that the agent is authorized |
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Ratification |
If a person accepts the benefit of an unauthorized transaction or fails to reproduce it, then he is as bound by the act as if he had originally authorized it. |
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subpoena |
an order to appear at a particular place and time. a subpoena duces tecum required the person to produce certain documents or things |
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agencies do 3 things |
-make rules -investigate -punish |
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adjudicate |
to hold a formal hearing about an issue and then decide it (agencies) |
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administrative law judge |
a agency employee who acts as an impartial decision maker |
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4 ways to limit agency power |
-statutory control -political control -judicial review -information control and the public |
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employee at will |
can be fired for a good reason, bad reason, or no reason at all |
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National Labor Relations Act (NLRA or Wagner Act) |
-created the National Labor Relations Board to enforce labor laws -Prohibits employers from penalizing workers who engage in union activity -requires employers to "bargain in good faith" with unions |
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Family and Medical Leave Act (FMLA) |
guarantees both men and women up to 12 weeks of unpaid leave each year for childbirth, adoption, or a serious health condition of their own or in their immediate family |
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Consolidated Omnibus Budget Reconciliation Act (COBRA) |
former employees must be allowed to continue their health insurance for 18 months after being terminated from their job |
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wrongful discharge (public policy rule) |
an employer may not fire a worker for a reason that violates basic social rights, duties, or responsibilities |
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other common law protections for employees |
can't be fired for- refusing to violate the law performing a legal duty exercising a legal right supporting societal values |
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truth in hiring |
oral promises made during the hiring process can be enforceable, even if not approved by the company's top executives |
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contract law protections for employees |
-truth in hiring -employee handbooks -covenant of good faith and fair dealing
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tort law protections for employees |
-defamation -intentional infliction of emotional distress |
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The Electronic Communications Privacy Act of 1986 |
permits employers to monitor workers telephone calls and email messages if- -the employee consents -the monitoring occurs in the ordinary course of business -in the case of email, the employer provides the email system |
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Fair Labor Standards Act (FLSA) |
regulates wages and limits child labor nationally |
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social security |
pays benefits to workers who are retired, disabled, or temporarily unemployed and to the spouses and children of disabled or deceased workers |
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Employee Retirement Income Security Act (ERISA) |
to protect workers covered by private pension plans |
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equal pay act of 1963 |
an employee may not be paid at a lesser rate than employees of the opposite sex for equal work |
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Title VII of the civil rights act of 1964 |
it is illegal for employers to discriminate on the basis of race, color, religion, sex, or national origins |
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disparate treatment |
must prove that they were treated differently -plaintiff present evidence discriminated against because of trait (prima facie case, no need to prove) -defendant present evidence decision was based on legitimate nondiscriminatory reasons -plaintiff must prove discrimination |
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disparate impact |
if the employer has a rule that, on its fact, is not discriminatory, but in practice excludes too many people in a protected group |
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defenses to charges of discrimination |
-merit -seniority -bona fide occupational qualification |
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quid pro quo |
a latin phrase that means "one thing in return for another" |
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The Age Discrimination in Employment Act (ADEA) of 1967 |
prohibits age discrimination against employees or job applicants who are at least 40 years old |
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disabled person |
someone with a physical or mental impairment that substantially limits a major life activity, or someone who is regarded as having such an impairment |
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Genetic Information Nondiscrimination Act (GINA) |
employers (with 15 or more workers) may not require genetic testing or discriminate against workers because of their genetic makeup |
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Sole Proprietorship |
-NOT separate taxable entity -IS personal liability for owners -Very easy to form -NOT easy bought and sold (can only sell entire business) -NO perpetual existence |
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Corporation |
-IS separate taxable entity -NO personal liability for owners -Difficult to form -IS transferable interests -IS perpetual existence |
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Close Corporation |
-IS separate taxable entity for C corporation -NO personal liability for owners -Difficult to form -Transfer restrictions for interests -IS perpetual existence -Protection of minority shareholders -No board of directors required |
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S Corporation |
-NOT a separate taxable entity -NO personal liability for owners -Difficult to form -Transfer restrictions -IS perpetual existence -Only 100 shareholders in US, one class of stock |
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Limited Liability Company |
-NOT a separate taxable entity -NO personal liability for owners -Difficult to form -transferable interests if agreement permits -IS perpetual existence (if yes in state) -No limit on shareholders/stock |
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General Partnership |
-NOT a separate taxable entity -IS personal liability for owners -Easy to form -NOT transferable -Perpetual if in the partnership agreement -management can be difficult |
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Limited Liability Parternship |
-NOT a separate taxable entity -NO personal liability for owners -Difficult to form -NOT transferable -IS perpetual if in partnership agreement |
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Limited partnership |
-NOT a separate taxable entity -NO personal liability EXCEPT for general partner -Difficult to form -IS transferable for limited partners if in agreement -IS perpetual |
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Limited Liability Limited Partnership |
-NOT a separate taxable entity -NO personal liability -Difficult to form -Transferable if agreement permits -IS perpetual |
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Professional Corporation |
-IS a separate taxable entity -NO personal liability -Difficult to form -Shareholders must all be members of the same profession -IS perpetual if shareholders exist -complex tax issues |
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Joint Venture |
-NOT a separate taxable entity -IS personal liability -Easy to form -NOT transferable -NOT perpetual -partnership for a limited purpose |
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Franchise |
-Everything depends on the form of organization chosen by participants -established business -name recognition -management assistance -loss of control -fees may be high |
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stakeholder |
anyone who is affected by the activities of a corporation such as employees, customers, creditors, suppliers, shareholders, and neighbors |
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business judgement rule |
-duty of loyalty -duty of care |
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duty of loyalty |
the obligation of a manger to act without a conflict of interest |
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duty of care |
-the requirement that a manager act with care and in the best interests of the corporation |
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self-dealing |
a manager makes a decision benefiting either himself or another company with which he has a relationship |
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corporation opportunity doctrine |
managers are in violation if they compete against the corporation without consent (buy something for themselves to benefit and not for the company) |
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acting under duty of care includes- |
-rational business purposes -legality -informed decisions |
