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Engler F05 Corporations - Outline

Engler F05 Corporations - Outline - Corporation Outline...

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Corporation – Outline www.swapnotes.com Page 1 of 30 Professor Engler Fall 2005 Agency A. 3 requirements to establish agency : a. Manifestation by principal that agent will act b. Acceptance by agent of the undertaking c. An understanding b/t the parties that principal will be in control of the undertaking B. Agent may bind the Principal a. Liability of the Principal to 3 rd Parties in Contract i. (Actual) Authority- Express and Implied 1. Mill Street Church of Christ v Hogan- Church hired Bill to paint and hire Petty if need help. Bill hires brother Sam and Sam gets hurt. Church had to pay worker’s comp b/c Bill had implied authority to act (Petty unavailable and in the past, church allowed Bill to hire Sam) a. Restatement of Agency-Section 26-Creation of Actual Authority -can get authority to act by written/spoken word or by actions of the principal that the agent reasonably determines means the principal gave him authority to act Æ principal acts in a manner that leads agent to believe he has authority to act . ii. Apparent Authority- an agent has apparent authority sufficient to bind the principal when the principal acts in a manner as would lead a reasonably prudent person to suppose the agent had the authority he purports to exercise 1. 370 Leasing Corp v Ampex Corp- 370 made K to buy from D w/ D’s employee who didn’t have authority to make deal. D is bound by the K. a. Restatement of Agency Section 27-Creation of Apparent Authority -similar to section 26, but 3 rd party believes the agent has authority, but the agent himself doesn’t necessarily think so b. Apparent Authority creates a tension b/t protecting 3 rd parties and holding a co to a K it never would have entered into. c. D could’ve trained employees better or documented pp who have authority. 370 could’ve made sure person had authority iii. Inherent Agency Power- principal is liable for all the acts of the agent which are within the usual authority of such an agency. Restatement Section 194-195 1. Watteau v Fenwick- Manager authorized to buy bottled ales and mineral waters, but buys cigars and disappears. P sues principal. J/P. iv. Ratification -acceptance of the prior act that wasn’t authorized at the time, but becomes valid when principal finds out . (Restatement Section 82) 1. Botticello v Stefanowicz- H&W are TIC. P deals w/ H. W wont sell for less than $80k. H leases to P w/ option buy for $75 . Deal not valid b/c H wasn’t W’s agent since no manifestation and no ratification by W. v. Estoppel 1. To win on Estoppel, P needs to show : a. Principal through intentional or negligent words, acts etc creates the appearance of authority in the purported agent b. 3 rd party reasonably and in good faith acts in reliance c. 3 rd party changes position relying on appearance of authority 2. Hoddeson v Koos Bros.- P gives “sales clerk” $ for furniture to be delivered. No receipt. Not delivered. P suing for $ back. No apparent
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