Midterm 1 Notes PDF

no requirement forwritten contract 9m can beoral fiduciary relationship Definition 2 partyrelationshipwhere theagent is authored toacton behalf of and...

no requirement forwritten contract 9m can beoral fiduciary relationship Definition 2 partyrelationshipwhere theagent is authored toacton behalf of and underthe control oftheprincipal principal boss tailsthe shots agent sports agent realestateagent Capacity a A person has the capacity to be a principal and delegate to an agent if the person has the capality to do the act themselves b mental capacity may be an issue if there's a question regarding the formation or the continuation of an agency relationship can't form an agent printipal relationship Non Delegate obligations a there are some acts that the principal MUST operating onsomeone yousendyourfriend serform for themself b Ex signing a will voting service contracts jury duty testify Authority The agent must have sometype of authority in order to bind the principal to the agent's actions Definition Agent's legal relations ability to affect the prinipals  relationshiebetween principal iiiiiiiii.ie iiiin ia 1 express authority what the printiple has stated explinitly either orally or in writing Ex make a contrast with Toystory implied authority theagent may do whatever is reasonable i to assume the principalwould want him to do based on Ex make a contract with our top 3 execs of the year BASED ON Principals express statements pwhat did principal say principals actions Nature of agency Acts necessary to carry on the business Acts ordinarily done when carrying on the business relations c the 3rd party Apparent Authority hePrincipal'sbehavior causethe 3rd party to form a reasonable belief that the agent is authorized to ait in a patellar way reasonable belief based on King chloe 1 Printipal's statement tothe 3rd party 2 Prinsipal allows the agent to behave a certain way  3 Agent I give himself apparent authority In order for the principal to be bound by the agent's altions the agent must have some typeof authority Difference distinction between employees and independent contractors 1 mostimportant distinition principal's right to control the IÑ an we É works mianner of means of the Agents performance or 2 employees are generally subject to more control independent do it however theywant as long as the finalproduct is done Fiduciary Duties of A P DONT'S Duty of Loyalty the donts 1 conflict of Interest agent d If a no self ing when conducting the Principal's business unless the Principal consents with full knowledge of all relevant facts principal has to know about it b agent may not compete with the principal  S.nlye nTt u amnave'Yote'toaspi's pocketand putting it in yours c agent should not represent both parties to a transaction exception realstateagent 2 Confidentiality A definition Facts valuable to the P because they're notwidely known or would harm the P's business if they became known b agent cannot use or disclose conf info acquired through tie agency unless P agre A financial condition business plans contract bids tech discoveries customerfiles trades C the duty not to disclose confidential information CONTINUES even after the relation is terminated agency d Agent may use knowledge or skills acquired during the agency DO's Duty toobey instructions A must obey the P's reasonable instructions for carrying out agency business 2 Agent need not obey orders to behave illegally or Unethically 3 if the P's instructions are unilear the Agent has the duty to get clarificati from P Duty to act with care and skill Agent must act with the care competence diligence normally sed by A's in similar circumstances Agent must possess and exercise the degree of careand skill standard in that areas forthe kind of work the Agent possesses 3 this duty may be adjusted higher or lower but not eliminated doesn't if someone have experience pellefthientiality Futy to Notify Inform provide information 1 Agent must promply tell the P matters that she knows are reasonably relevant to the agency business and that she knows or should know the Principal would be concerned with 2 The principalhas an interest in being informed of matters important to the business agency no duty to notify if the agent receives confidential information Agent's Duties to account Agentmustgive the principal any or property receivedduring the course of agency business 2 Principalandagent mayagree thatthe Agentmay retain certain benefits received duringthe agen tickets tips etc mist 3 keep accurate records of accounts of collections receipts and expenditures 4 Generally an Agent should NOT thepis property with A's ogle  g blending funds or properties that should bekept separate contingency don't get Principals duty to theagent Money unless you win or Dutyto compensate settle 1 location of terms ofcompensation a agency contract b relationship oftheparties andsurrounding c if amount is not stated anywhere market price customary price if stillno info reasonable price 2 compensation may depend on a particular result a real estate b attorney c Agent onlyreceives compensation if they achieve a particular resultwithin a set time or reasonable time 3 The principal does not have to compensate the agent IF d Agent did something unasked for not in the contract  b the agent materially breached the agency contract OR c seriously breached fiduciaryduty Duties of Reimbursement andIndemnity 1 unless there's an agreement tothe contrary the Agent is entitled to reimbursement for expenses incurred making expressly orimpliedly authorized expenditures onthe Principal's behalf 2 Indemnity implied promise by P pA that the P will pay forlosses resulting fromth A's authorized activities Termination of the Agency Relationship Termination by act of the parties 1 at a time specified or when a particulareventoccurs as stated inthe agreement 2 if the agency wasestablished to accomplish a particularresult occurred 3 At anytime bymutual agreement of the parties 4 at theoption of 1oftheparties a whenthe P chooses to end the agency relationship revocation P revoises b When the A renunciation A renounces C the terminating party may be responsible for damages unlessthe termination is  justified bythe other party's serious fiduciary duties Termination by Operation of Law 1 usually involves situations a where it's reasonable to believe the P would not want the A to act any further OR b the accomplishment of agency objectives has become impossible or illegal Effect ofthe termination on the A's authority 1 once the agency terminates express and implied authority ends apparent authority evenafter agencyends wnifa.it ntetnfraaYpartfinofqe 3 apparent authority ends by operation of law a P's death b Pls loss of capacity C impossibility 4 Apparent authority ends whenthe3rd partyreceivesnotice a actual notification b constructive notification  Contract Liability Of the Principal Principal will generally beliable for contractsmade agent if the agent had by an express I implied or apparent authority to enter intothe contract OR Theprincipal chooses to bind herself to an agents unauthorized contract by ratifying the contract 1 express authority to contract P tells A orally or in writing to make a contract With a 3rd party 2 impliedauthority to contract A may do whatever is reasonable to assume the P wants them to do based on 3 Aprincipalmay limit an agent'simpliedauthoritythroughexpress statements 4 Whiletheagent would have impliedauthoritytodo whatwas necessary regarding making contractsnecessary to run the business there are certain actions than an Agentgenerally cannot take a Agent can't sellreal property UNLESS the business is real estate b can't borrow 5 Apparent Authority to contract The principal's behavior causes a 3rd party to form a reasonable belief that the Agent is authorized to act in a certain way 6 Apparent authority is based on a communications between principal and 3rd party that creates a reasonable appearance of authority b trade customs business practices c placing the agent in a position that ordinarily involve the agent to have authority to make contracts Agent's Notification of knowledge 1 If the 3rd party gives proper notification to an Agentwho has authority to receive it it's as if the principal had been notified If agent notifiesthe 3rd party it's as if the Principal had notified the 3rd party 3rd party A 3rd party p A 3rd Party P 3rd party 2 Principal may be considered as knowing whatthe agent knows a knowledge relevant to the business b agent has duty to disclose  If the agent has no authority you can talk about ratification Ratification 1 only considered After it's determined the A had no type of authority to bind the P to a contract 2 The P chooses to bebound to a A's unauthorized contract 3 Once the P ratifies the contract is As IF the A had authority at the time it was made 4 express ratification P's words 5 implied ratification P's behavior indicates an intentto ratify a acceptance of the benefits b paying the bill C SOMETIMES P'S silence failure to repudiateas indicateratification say no 6 Funfacts requirements about ratification incomplete list a act ratified must have been valid at the time it was performed make sure it's legal b 3rd party has to have knownthat the Agent was acting on behalf of the principal c The P must be legally thetime of the ratification ligament d ThePmusthave full knowledge of an material facts at the time of the ratification  A's knowledge is NOT mythp e all or nothing can't selectively notify parts mustratify completely or not at all 7 Intervening events whichmay cut off the P's power to ratify A 3rd party's withdrawal from the contract b 3rd party's death or loss of capacity c TheP's failure toratify within a reasonabletime d When it's unfair to the 3rd party togo through thecontract Does the agent have authority Yes or no If no goto ratification Contract Liability of the Agent key variable to determine if an agent is liable on an authorizedcontract made on behalf of the principal in ADDITION to the principal is the nature of the principal Disclosed Principal 1 3rd party knowsor has reasonto know the agent is acting for the principal a A is acting for P b the P's identity 2 Gettin when the agenthad S it in In agitment the see needs to Partially Disclosed unidentified 1 3rd party knows or has reason to know a A is acting for a P b but doesn't know navereasontoknowtnepisia.mn 2 Agent is liable unless there's an agreement FYE e to the lontrary where the 3rd party agrees not to f cardi 13buying hold the Agent liable houses Undisclosed Principal 1 3rd party lacks knowledge or reason to know a Pls identity b that the P exists 2 3rd party will think the A is the P Agent is liable only talk about the nature of the principal if discussing the agent's contract  y y y Tort liability of the principal when might a P be liable when their A commits a torts Respointedt ipetioti.atitycrs 1 An employer P willbeliablefortorts commited byagents who a are employeism p if it is an employee say independent amout on or contractor control AND da I siaand b whocommitthetortwithinthe seedeymente ftprunsoverAzley i employee's conductwas thesame generalnature as the waruthorized or incidental to it whatwas the agent doingwhen thetort ocurred crystal gettinggas to continue PPProute and ran overArley ii occurred substantially withinthe authorized time don'thaveto decide courtfinds then the it occurred substantially withinthe authorized location iv theemployeesactions aremotivated at least in part to servethe employer RSLapplies to an agentsactions both for intentional tortandnegligence If one is missing the Principal is not liable Allhave to bethere for theprincipalto be liable 1 Vicarious Liability a ant 3ʳᵈParty Agent Principal  y y T.im a Directliability 1 Principal is at fault 2 differences with RSL a liability is not vicarious P is at fault b no scopeof employment requirement c agent does not have to be an employee 3 Principal is liable for the agent's tortious conduct if the agent acts within their actualauthority or P ratifies the A's conduct a P directs the A's conduct and the principal intendsforit to occur OR b the principal is negligent regarding the agent iii firing intent L se i i i iii iiii iii.ie Generally speaking P's will not be liable for torts tommitted by independent contractors  Tort Liabilityof the Agent Agents are liable for their own torts Torts suits against the Pand A 7 Loption joint liability 3rd P sues both the principal and agent together 2 2 option several liability 3rd P sues the principal or the agent and gets a judgement 3 P may have to indemnify the agent if the agent satisfied the judgement 4 the principal may not haveto indemnify the A if the A owned aduty to the 1