Agency

Question 1

A relationship in which one party is authorized to act on behalf of another party

Answer 1

Agency—agent has a fidcuiary duty to act in best interest of principal

Question 2

A special agency situation in which a person authorizes another person to act as his/her representative, in writing

Answer 2

Power of attorney

Question 3

A special agent acting for either buyer or seller in business transactions

Answer 3

Broker

Question 4

An agency situation in which the only agent that the principal may deal with for acertain purpose during life of the contract is this agent

Answer 4

Exclusive agent (ex. real estate broker who has sole right ot sell proeperty except for personal sale by principal)

Question 5

A sales agent who, prior to the creation and as a condition of the agency, guarantees the accounts of the customers to his/her principal (fi the customers fail to pay)–not within the Statute of Frauds, so doesn’t need to be in writin

Answer 5

Del credere

Question 6

A computer program or electronic method to take some action without specific human review (ex. authorizing an online search to the find the lowest price for something)(

Answer 6

E-agent

Question 7

An agent with a broad range of powers

Answer 7

General agent

Question 8

An agent that engages in only one specific type of transaction for the principal

Answer 8

Special agent

Question 9

An agent who is hired by another agent

Answer 9

Subagent

Question 10

An agency relationship formed without consideration (valid form, b/c consideration not required)

Answer 10

Gratuitous agency

Question 11

Agency relationship formed be being implied by the conduct or lack of conduct by either the principal or agent that allows third parties to reasonably believe an agency exists

Answer 11

Agency by estoppel

Question 12

Authority granted to an agent that comes from the principal; can be express or implied

Answer 12

Actual authority

Question 13

Authority that comes from a third party’s reasonable, but mistaken, belief that the agent has actual authority to enter into the contract

Answer 13

Apparent authority

Question 14

Occurs when a third party knows of hte existence of hteprincipal AND knows the indentity of hteprincipal

Answer 14

Disclosed principal

Question 15

Occurs when the third party knows of the existence of hte principal, but does not know the identity of the principal

Answer 15

Partially disclosed principal

Question 16

Occurs when the third party does not know of the existence of the principal

Answer 16

Undisclosed principal

Question 17

Occurs when a principal chooses to be bound by the terms of an unauthorized contract. Valid if:

1. 3rdparty knew of principal’s existence b/f entering into contract
2. principal has knowledge of all material facts
3. 3rd party does not withdraw (therefore cannot occur if pricnipal is undisclosed)

Answer 17

Ratification

Question 18

Arises when the conduct of the agent creates a loss for the third party

Answer 18

Tort liability—agent always personally liable

Question 19

Doctrine that holds a principal liable for a tort committed by an agent in the scope of employment

Answer 19

Respondeat superior

Question 20

Notice of termination of agency relationship that is sufficient to third parties who have not previous ly dealt with the agent (ex. newspaper article)

Answer 20

constructive notice–does not need to be read to be valid

Question 21

Notice of termination of agency relationship that must be given to third parties who have previously dealth with agent unless third party learns of termination from another source

Answer 21

Actual notice