Chap. 29

Question 0

What is an agency?

Answer 0

The principal-agent relationship; the fiduciary relationship “which results from the manifestation of consent by one person to another that the other shall act in his behalf and subject to his control, and consent by the other so to act”

Question 1

What is agency law?

Answer 1

The large body of common law that governs agency a mixture of contract law and tort law.

Question 2

What is the principal?

Answer 2

A party who employs another person to act on his or her behalf.

Question 3

What is an agent?

Answer 3

A party who agrees to act on behalf of another.

Question 4

What is a principal-agent relationship?

Answer 4

A relationship formed when an employer hires an employee and gives that employee authority to act and enter into contracts on his or her behalf.

Question 5

What is an employer-employee relationship?

Answer 5

A relationship that results when an employer hires an employee to perform some task or service but the employee has not been authorized to enter into contracts on behalf of his employer.

Question 6

What is an express agency?

Answer 6

An agency that occurs when a principal and an agent expressly agree to enter into an agency agreement with each other.

Question 7

What is an exclusive agency contract?

Answer 7

A contract a principal and agent enter into that says the principal cannot employ any agent other than the exclusive agent.

Question 8

What is a principal-independent contractor relationship?

Answer 8

The relationship between a principal and an independent contractor who is not an employee of the principal but that has been employee by the principal to perform a certain task on behalf of the principal.

Question 9

What is the power of attorney?

Answer 9

An express agency agreement that is often used to give an agent the power to sign legal documents on behalf of the principal.

Question 10

What is general power of attorney?

Answer 10

A power of attorney where a principal confers broad powers on the agent to act in any matters on the principal’s behalf.

Question 11

What is an implied agency?

Answer 11

An agency that occurs when a principal and an agent do not expressly create an agency, but it is inferred form the conduct of the parties.

Question 12

What is an agency by ratification?

Answer 12

An agency that occurs when a person misrepresents him- or herself as another;’s agent when in fact he or she is not and the purported principal ratifies the unauthorized act.

Question 13

What are apparent agency’s? (agency by estoppel)

Answer 13

Agency that arises when a principal creates the appearance of an agency that in actuality does not exist.

Question 14

What is a duty to compensate?

Answer 14

A duty that a principal owes to pay an agreed-upon amount to the agent either upon the completion of the agency or at some other mutually agreeable time.

Question 15

What is the duty to reimburse?

Answer 15

Unless otherwise agreed, the principal owes a duty to reimburse the agent for expenses incurred by the agent if the expenses were authorized by the principal, within the scope of the agency, and necessary to discharge the agent’s duties in carrying out the agency.

Question 16

What is the duty to indemnify?

Answer 16

A principal owes a duty to indemnify the agent for any losses the agent suffers because of the principal’s conduct.

Question 17

What is the duty to cooperate?

Answer 17

Unless otherwise agreed, the principal owes a duty to cooperate with and assist the agent in the performance of the agent’s duties and the accomplishment of the agency.

Question 18

What is a duty to perform?

Answer 18

An agent’s duty to a principal that includes performing the lawful duties expressed in the contract and meeting the standards of reasonable care, skill, and diligence implicit in all contracts.

Question 19

What is a duty to notify?

Answer 19

An agent owes a duty to notify the principal of important information concerning the agency.

Question 20

What is imputed knowledge?

Answer 20

Information that is learned by an agent that is attributed to the principal.

Question 21

What is a duty to account (duty of accountability)?

Answer 21

A duty that an agent owes to maintain an accurate accounting of all transactions undertaken on the principal’s behalf.

Question 22

What is an agency coupled with an interest?

Answer 22

A special type of agency that is created for the agent’s benefit and that the principal cannot revoke.

Question 23

What is wrongful termination?

Answer 23

The termination of an agency contract in violation of the terms of the agency contract. The non breaching party may recover damages from the breaching party.