Flashcards in Agency Deck (22)
In what 3 scenarios is an agency irrevocable?
1. When coupled w/ interest (ex: good consigned to A by P where agent works on commission)
2. After it's been partly exercised
3. If for fixed period then cant revoke before time expires (except w/ sufficient cause)
When is an agency terminated by operation of law (6)?
1. death of P or A
2. Insanity of P or A
3. Bankruptcy of P
4. Impossibility of performance
5. Changed circumstances
6. War b/w P & A's countries
What are the 4 ways an Agency's Authority can be revoked?
1. Expiration of time/ accomplishment of purpose
2. Death or incapacity of principal
3. Unilateral act of P or Agent
4. Operation of law
What is the main distinction b/w a disclosed & undisclosed principal?
Disclosed: Existence & identity of P are known to 3rd parties
-Identity unknown, existence known (partially disclosed)
-agent acting on P behalf is unknown to 3rd party (undisclosed)
When will a court order construtive trust be maintained due to the breach of duty of an agent?
Where assets being compensated are identifiable (traceable)
-Awarded to continuing, identifiable profit of a self-dealing agent
*Courts will remedy profits of self-dealing agent by rendering an account of the profits
What are the 2 main duties of a principal?
1. compensation/ reimbursement
-P liable for K's of Agent
What are the 3 main fiduciary duties of an Agent?
1. Reasonable care: no negligence
-duty not to accept new obligations inconsistent w/ duties owed to Principal
3. Loyalty: no self-dealing
-cant receive benefit to P's detriment
-cant usurp opportunity of P
-can't take secret profits at P's expense
When can authority be granted after K was entered into? (ratification)`
1. when principal has knowledge of all material facts regarding K
2. Principal accepts benefit of K
*Principal not liable for K until he ratifies it
What are the 4 types of authority of an agent?
2. Implied (necessity, custom, prior dealings)
3. Apparent (agent cloaked w/ appearance of authority; 3rd party reasonably relies)
What are the 3 exceptions to the general rule that intentional torts are outside agency relationship?
1. specifically authorized by principal
2. natural fr type of employment
3. motivated by desire to serve principal
What is the main distinction b/w a frolic and a detour?
Frolic: new & independent journey (principal not vicariously liable)
Detour: mere departure (principal still vicariously liable)
When will a principal be vicariously liable for torts committed by his agent? (2)
1. principal- agent relationship exists
2. committed by agent w/in scope of employment
-tort occurred on job
-agent intended benefit to principal
When must express authority to enter agency K be in writing?
1. conveys land
2. conveys interest in real estate that lasts over 1 year
What are the 2 exceptions to the general rule that a principal is not vicariously liable for torts of independent contractors? (i.c.)
1. IC is engaged in ultra-hazardous act when tort occurred
2. Estoppel: i.c. holding out appearance of agency
what 3 elements must be present for a principal- agent relationship to exist?
1. Assent: agreement b/w principal (w/ capacity) & agent
2. Benefit: agent's conduct for principals benefit
3. Control: principal controls agent via power to supervise agents performance
What are the 2 main ways a joint venture is terminated?
-terminate at time specified in K or
-upon accomplishment of its purpose
-death of active member
-court decides serious disagreement b/w members make continuation impractical
What is the main distinction b/w a partnership & a joint venture?
Partnership: long-term business relationship
Joint venture: single business transaction
* both treated same for federal income tax purposes
What are the 2 fiduciary responsibilities each joint venture owes each other?
1. standard of care to other members
2. duty to act in good fait in matters concerning common interests of enterprise
What are the 3 rights of entity parties in a joint venture?
1. control enterprise
2. share profits
3. share losses
What is a joint venture?
entity formed b/w 2 or more parties to undertake economic activity together
*could be corp, LLC, or partnership
What 2 actions do parties in a joint venture perform?
1. contribute equity
2. share revenue, expenses and control