Agency Flashcards
(22 cards)
Actual Authority
Express or Implied
Express - Agent is expressly given authority to act for the principal
Implied - Principal’s conduct leads the agent to believe that they have authority. This authority can be implied by custom, course of conduct, necessity, or emergency.
Requirements for agency relationship
Consent and Control
- Consent by both the principal and the agent that the agent will act for the benefit of the principal.
- That the agent is subject to the principal’s control
Termination of actual authority
Actual authority terminates after a reasonable time or following a change in circumstances, death, or incapacity of the principal.
Apparent Authority
- Person dealing with the agent must do so with reasonably belief in the agent’s authority
- Belief must be generated by some act or neglect on the part of the principal
Ratification
Even if the agent did not have authority to enter into a transaction the principal can ratify the acts and thus become liable either explicitly or impliedly by affirming or accepting the benefit of the acts so long as the principal knew the material facts and have capacity.
When is an agent bound to a 3rd party
When he enters into a contract and the agent had no actual or apparent authority to enter into it. Also an agent is liable if the principal is undisclosed or if the principal is partially disclosed. Also agent is bound to the principal for breach of contract if the agent acts beyond his authority
Principal (employer) tort liability
A principal can be vicariously liable or directly liable for torts committed by his agent.
- Scope of employment
- Minor deviation from employment
- An intentional tort committed for the benefit of the principal, authorized by the principal, or one that arose naturally due to nature of employment
True or False an agent is always liable for his own torts
True
Indemnification
The principal can recover against the agent for indemnification if the agent acts beyond their authority
Direct Liability of a Principal
The principal is directly liable for his own negligence if he negligently hired the agent, failed to fire the age, or failed to properly supervise the agent
Duties an agent owes to a principal
Duty of care and duty of loyalty
True or false: A principal may recover losses from and profits made by a breaching agent
True
A partnership is…
the association of two or more persons to carry on as co-owners of a business for profit. It does not matter whether or not the parties intended to form the partnership.
Profit Sharing
Creates a presumption that a person is a partner unless the profits were received in payment of a debt, rent to a landlord, or wages.
What is the default partnership
General Partnership
Who are the co-managers of a partnership
Partners and agents
Majority vote vs. Unanimous vote in a partnership
Majority vote is needed for disagreements within the partnership
Unanimous vote is needed for extraordinary matters
Incoming partner liability
Not liable for prior debts of the partnership but their capital contributions can be used to satisfy the debts
Outgoing partner liability
Outgoing partner is personally liable for debts incurred during the time at the partnership
Fiduciary duties of partners
Partners are in a fiduciary relationship with one another and must act in good faith. They are charged with the duty of loyalty, duty of care, and duty to account.
How to end a partnership
- Dissolution - the change in the relation of the partners
- Winding up - partnership assets are liquidated and creditors are paid. During this time partners are still liable for any liabilities that occur during this time
- Termination - partnership ended
When does a partnership end
Once winding up is complete
