Business law chapter 29

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

The principal-agent relationship; the fiduciary relationship "which results from the maniffestation 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"

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

A party who agrees to act on behalf of another.

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.

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.

A person or business that is not an employee but is employed by a principal to perform a certain task on behalf of the principal.

An agency that occurs when a principal and an agent expressly agree to enter into an agency agreement with each other. this is the most common type. Agent may also possess implied or apparent authority to act on the principal's behalf.

A contract a principal and agent enter into that says the principal cannot employ any agent other than the exclusive agent. If he enters into another contract the agent can recover damages. If not exclusive principal can employ more than one agent for same purpose and when one agent accomplishes the stated purpose all are terminated.

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

An agency that occurs when a principal and an agent do not expressly create an agency, but it is inferred from the conduct of the parties. This agency can be conferred by industry custom, prior dealings, agent's position ect. Implied authority cannot conflict with express authority or with stated limitations on express authority.

Often an express agency doesn't provide details to cover contingencies that may arise in the future regarding performance of the agency. The agent possesses certain implied authority to act beyond his express agency powers. Certain emergency situations may arise. If principal can't be contacted agent has emergency powers to take all actions necessary to protect principal's property and rights. Example they go out of town and leave home with real estate agent. Pipe breaks. Agent must fix it and principal must pay;

An agency that occurs when 1. a person misrepresents him or herself as another's agent when in fact he or she is not and 2, the purported principal ratifies the unauthorized act.

Agency that arises when a principal creates the appearance of an agency that in actuality does not exist. Authority is created when principal leads a third party to believe the agent has authority. Principal and third party are both bound to contract.

1. duty to compensate
2. dduty to reimburse and indemniufy
3. Duty to cooperate

A duty that a principal owes to pay an agreed upon amount to the agent either upon completion of the agency or at some other mutually agreeable time. Usually specifies amount. If none agent paid customary fee for industry.

Often used where the principal owes a duty to pay only if the agency is completed. Examples who work on contingencies are real estate brokers, finders, lawyers, and sales people.

unless otherwise specified, the principal owes a duty to reimburse for all expenses if they were 1. authorized by the principal, 2 within the scope of the agency, and 3. necessary to discharge an agent's duty in carrying out the agency.

A principal owes a duty to indemnify the agent for any losses the agent suffers because of the principal. This generally arises where an agent is held accountable for the principal's misconduct.

A principal owes a duty to assist in the agent's duties and accomplishment of the agency. Example hire real estate agent must allow agent to show house to buyers during reasonable hours.

1. duty to perform
2. duty to notify
3. duty to account

An agent's duties to a principal that includes 1. performing the lawful duties expressed in the contract and 2. meeting the standards of reasonable care, skill, and diligence implicit in all contracts. An agent who fails to do this will be held liable for breach of contract.

If an agent learns information from third parties or other sources and is important to the principal they must notify the principal

Information that is learned by an agent is attribeted to the principal. THis means it is asssumed that the principal knows everything the agent does, even if he doesn't know.

A duty that an agent owes to maintain an accurate accounting of all transactions undertaken on the principal's behalf. A principal has a right to demand accounting at any time and agent is boudn to make acounting. Must maintain separate account for principal and use principal's property in an authorized manner.

1. mutual agreement
2. lapse of time
3. purpose achieved
4. occurrence of a specified event

Can mutually agree to terminate the agreement. If they do this they relieve each other of any further rights, duties, obligations, or powers. Either party can propose termination

When contracts are written for a specific time period, when the time period is up, the agency terminates. if not specified then reasonable time.

A principal can employ an agent for the time it takes to accomplish a task, such as eelling a house, when the task is complete, the agency terminates.

An agency contract can specify that the agency exists until a specified event occurs. It terminates whenever the eventg occurs.

If an agency is terminated, the principal is under a duty of notification of the termination of the agency to third parties. Unless otherwise specified, the notice can be from the principal or from some other source.

Direct notice of termination must be given to those who dealt directly with the agent. the notice may be written or oral, written is generally preferred.

The principal must given direct or constructive notice to any third party who has knowledge of the agency but with whom teh agent has not dealt. Direct notice is often in the form of a letter. Constructive notice is placing a notice of termination of in a local paper. This notice is effective even on those who didn't see it!

Generally not obligated to give notice of termination to strangers who have no knowledge of the agency.

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

The termination of an angency contract in voilaqtion of the terms of the agency contract. The nonbreaching party can recover damages from the breaching party.

1. Death
2. insanity
3. Bankruptcy
4. Changed circumstances
5. War

Death of either principal or agent terminates it based on the leagl principal that because a dead person cannot act, no one can act for her.

The insanity of either party terminates it some states say enforceable if 1. person not adjudged insane, 2. third party doesn't have knowledge of insanity at time of contracting. 3. Enforcement of contract prevents injustice.

An agency relationship is terminated if the principal is declared bankrupt. THis means they file for bankruptcy. The filing of an agent for bankruptcy usually doesn't terminate it unless the agent's credit standint is important to the relationship.

An agency terminates when there is an unusual change in circumstances that would lead the agent to believe that the principal's original instructions should no longer be valid. Such as if they agreed to sell a farm for 100k and then they discovered oil that made it worth 1,000,000 then the agency would terminate.

The outbreak of war between a principal's country and the agent's country terminates an agency relationship between the parties. Usually makes the performance of an agency contract impoissible.

If there is loss or destruction of the subject matter
loss of a required qualification
change in the law