Agency Law Flashcards

1
Q

What is Agency Law?

A

Agency Law deals with someone’s ability to bind you to a contract with a third party

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2
Q

What is required for Agency to exist?

A

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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3
Q

What is Actual Authority in an agency?

A

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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4
Q

What is Implied Authority in an agency?

A

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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5
Q

What is Apparent (Ostensible) Authority in an agency?

A

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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6
Q

How is an Agency terminated?

A

*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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7
Q

How do you terminate Apparent Authority?

A

*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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8
Q

What is an Agency Coupled with an Interest?

A

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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9
Q

When is an employee an Agent; and when does this make the employer liable?

A

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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10
Q

When are Agents liable for torts (civil wrongs) they commit?

A

Agents are liable for torts (civil wrongs) committed whether they had authority or not

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11
Q

Are Agents who act outside of their authority liable?

A

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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12
Q

What is an Agent’s liability when acting for an undisclosed principle?

A

*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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13
Q

What are the requirements for a Power of Attorney (POA)?

A

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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