MGMT 311 - Chapter 19: Agency Relationships
24 Questions
0 Views

Choose a study mode

Play Quiz
Study Flashcards
Spaced Repetition
Chat to lesson

Podcast

Play an AI-generated podcast conversation about this lesson

Questions and Answers

Under what circumstances might an employer be held liable for an agent's intentional torts?

  • If the employer had no knowledge of the agent's actions.
  • If the tort was committed outside of the workplace.
  • If the agent was acting in their personal capacity.
  • If the employer was involved in the tortious act. (correct)

    • What is the primary reason an employer is not liable for the negligent acts of an independent contractor?

  • Independent contractors are always more skilled.
  • The employer has no control over the contractor's performance. (correct)
  • Independent contractors work under separate laws.
  • The employer cannot be held responsible for external actions.

    • What does the term 'revocation' refer to in agency law?

  • The principal's act of terminating the agency relationship. (correct)
  • The process of transferring an agency to another agent.
  • The automatic termination of the agency relationship.
  • The agent's voluntary termination of their authority.

    • In which scenario would apparent authority continue even after an agency has been terminated?

    <p>When a third party has not been informed of the termination.</p> Signup and view all the answers

    What is the primary criterion the IRS uses to determine if a worker is an employee or an independent contractor?

    <p>The degree of control the business exercises over the worker</p> Signup and view all the answers

    What is a mutual agreement in the context of terminating an agency?

    <p>Both parties agree to terminate the agency relationship.</p> Signup and view all the answers

    Which of the following describes the ownership of copyright for a work created by an independent contractor?

    <p>The independent contractor owns the copyright</p> Signup and view all the answers

    Which of the following can lead to a wrongful termination claim in an agency relationship?

    <p>The principal fails to provide reasonable notice of termination.</p> Signup and view all the answers

    How does strict liability apply to activities performed by independent contractors?

    <p>It is only imposed on hazardous activities.</p> Signup and view all the answers

    An agency relationship created through express agreements typically requires which of the following?

    <p>Consent and agreement from both parties</p> Signup and view all the answers

    Under which circumstance might an agency be established by ratification?

    <p>When the agent performs duties outside their authority and the principal later approves the act</p> Signup and view all the answers

    What must a principal do when terminating an agency to prevent apparent authority from continuing?

    <p>Inform any third parties who were aware of the agency.</p> Signup and view all the answers

    What does 'Respondeat Superior' imply regarding employer liability?

    <p>Employers can be held liable for torts committed by employees during the scope of their employment</p> Signup and view all the answers

    What is a key feature of an agency relationship established by estoppel?

    <p>It arises from the principal's actions that mislead a third party to believe an agent is authorized</p> Signup and view all the answers

    Which type of misrepresentation occurs when an agent falsely claims authority to bind a principal?

    <p>Fraudulent misrepresentation</p> Signup and view all the answers

    In terms of the scope of employment, which of the following is correct?

    <p>Liability arises only if the employee's acts were directly for the employer’s benefit</p> Signup and view all the answers

    What does the implied warranty of authority signify in agency relationships?

    <p>An agent is presumed to have the authority to act on behalf of the principal.</p> Signup and view all the answers

    Under the doctrine of respondeat superior, who is liable for the negligent acts of an employee?

    <p>The employer, if the employee was acting within the scope of employment</p> Signup and view all the answers

    What type of liability arises for torts committed by an agent?

    <p>Both principal and agent can be held liable depending on the situation.</p> Signup and view all the answers

    What does agent misrepresentation entail in the context of agency law?

    <p>An agent misrepresenting their authority to third parties.</p> Signup and view all the answers

    In assessing whether an agent acted within the scope of their employment, which factor is most important?

    <p>The overall purpose of their act.</p> Signup and view all the answers

    How can the liability of a principal be limited concerning the actions of their employees?

    <p>By clearly defining the scope of the agency contract.</p> Signup and view all the answers

    Which criterion is NOT typically considered when determining the status of a worker as an employee versus an independent contractor?

    <p>Whether the worker is a relative of the employer.</p> Signup and view all the answers

    Which option is a factor that does NOT indicate someone is likely an independent contractor?

    <p>Working under the employer's direct supervision.</p> Signup and view all the answers

    Study Notes

    MGMT 311 - Chapter 19: Agency Relationships

    • Agency is defined as the fiduciary relationship created when one party consents to another acting on their behalf, subject to their control. Fiduciary is key.
    • Agency relationships are categorized as: Employer-Employee and Employer-Independent Contractor.
    • Employer-Employee relationships often involve employees interacting with third parties, making them agents of the business.
    • Employer-Independent Contractor relationships involve individuals contracted to perform tasks but not controlled by the employer.
    • Determining whether a worker is an employee or independent contractor involves evaluating control over work details, distinct occupation, tools provided, employment length, payment method, and required skill.

    Determination of Employee Status

    • IRS criteria prioritize the degree of control the business exercises over the worker.
    • Misclassification (incorrectly categorizing workers) can lead to significant tax liabilities.
    • Employees who create copyrighted work are typically the copyright holders. Exceptions exist, with "work for hire" status. If an employee creates a work with the scope of their job, the employer generally owns copyright.
    • Independent contracts do not commonly fall under copyright laws.

    Formation of Agency Relationship

    • Agency relationship formation is consensual (voluntary).
    • Agreements don't necessarily need to be written.
    • Agency relationships made for illegal purposes are invalid.
    • Written or oral agreements can create agency relationships based on expressed or implied terms.
    • Agency by ratification occurs when a principal accepts a contract made by someone (not an authorized agent) and thus becoming bound by the contract.
    • Agency by estoppel occurs if a person represents themselves as an agent, allowing third parties to reasonably believe it, and the principal does nothing to rectify this.
    • Agency relationships can be created by law.

    Duties owed to the Principal

    • Agents owe principals duties of performance, notification, loyalty, obedience, and accounting.
    • Performance involves diligently carrying out duties with reasonable care.
    • Notification requires agents to inform principals of all relevant matters.
    • Loyalty dictates that agents act solely in the principal’s best interest.
    • Obedience requires following lawful, clear instructions.
    • Accounting involves keeping accurate records and reporting all funds.

    Duties owed to the Agent

    • Principals owe agents duties of compensation, reimbursement, indemnification, cooperation, and safe working conditions.

    • Compensation involves paying a fair price for services rendered.

    • Reimbursement covers expenses incurred by the agent.

    • Indemnification protects agents from liabilities arising from authorized actions.

    Agent's Authority

    • Agency authority can be actual (expressed or implied) or apparent.
    • Expressed authority clearly outlines the agent's powers to act.
    • Implied authority logically flows from expressed authority.
    • Apparent authority arises when a principal leads a third party to believe an agent has specific authority, but the agent does not have this authority.
    • Power of Attorney (POA) provides express authority.

    Agent's Authority Cont'd

    • Emergency powers allow agents to act in extraordinary situations to protect the principal's interests.
    • Ratification signifies a principal's acceptance of an agent's previously unauthorized actions.

    Liability in Agency Relationship

    • Principal liability depends on whether the agent's actions were authorized or not.
    • Liability classifications include disclosed, partially disclosed, and undisclosed principals.
    • Disclosed principals' identities are known to third parties; liability generally rests with the principal.
    • Undisclosed principals' identities aren't apparent, potentially exposing both agents and principals to liability.

    Liability for Torts & Crimes

    • Principals' liability for agent's torts depends on several factors, including principal negligence and authorization to commit tortious acts.
    • Respondeat superior holds employers liable for their employees' negligent actions within the scope of employment.
    • Scope of employment determines whether an action is within the agent's duties.
    • An employer is not usually liable for an independent contractor's tortious acts.

    Termination of Agency

    • Agency relationships can end by act of the parties (mutual agreement, revocation, renunciation) or by operation of law (death, incapacity, bankruptcy).
    • All parties (and third parties aware of an agency relationship) need to be notified of a termination to ensure issues of liability are clarified.

    Studying That Suits You

    Use AI to generate personalized quizzes and flashcards to suit your learning preferences.

    Quiz Team

    Related Documents

    MGMT 311 Agency Relationships PDF

    Description

    Explore the intricacies of agency relationships as defined in MGMT 311 Chapter 19. This chapter delves into the definitions, categories, and criteria for determining employee status versus independent contractors, emphasizing the importance of fiduciary responsibilities. Understand the implications of misclassification and the IRS criteria in these relationships.

    More Like This

    Use Quizgecko on...
    Browser
    Open
    Browser
    Browser