Bierschbach F06 Corporations Outline

Bierschbach F06 Corporations Outline - AGENCY LIABILITY OF...

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A GENCY L IABILITY OF P RINCIPAL IN ITS A GENTS ’ C ONTRACTS (1) manifestation by principal that agent will act for him (2) acceptance by agent of the undertaking, and (3) an understanding between parties that principal would be in control of undertaking. (Marriage or joint ownership of land does not in and of itself create an agency, partners are agents of each other.) Implied Authority : Exists when : Agent reasonably believes based on past or present conduct that the employer intends to grant him this authority. Factors : (1) existence of prior similar practices, (2) specific conduct between principal and agent in the past. Apparent Authority “Holding Out” : Exists when : (a) Agent acts in a manner that would lead a reasonable and prudent person to suppose that the agent has the authority, or (b) For issues that are usual and proper for this type of employment Third Party’s belief : Third party’s belief that agent had authority is relevant to the issue of finding apparent authority, but not actual or implied authority. Inherent Agency Power; Unauthorized Agent and Undisclosed Principals : No “holding out” is necessary for agent to bind undisclosed principle when third party reasonably assumes agent is principle for the type of transactions that agent would normally have authority to conduct. Restatement §8(a) ( Inherent Agency ) - Power of an agent not derived from authority, apparent authority or estoppel but solely from the agency relation and exists for the protection of persons harmed by dealing with a servant or agent. Restatement § 194 (Acts of general agents) A general agent for an undisclosed principal, authorized to conduct transaction will subject his principle to liability for acts done on his account, if usual or necessary in such transactions even if forbidden by principal to do such acts Restatement § 195 ( Manager appearing to be owner ) - Principle is liable to third persons, when he entrusts an agent with management of a business, even if the agent acts contrary to principle’s direction. See Factors (1) third party is not aware (and should not be aware) of principle’s existence, and (2) agent customarily has authority for that type of thing. (Inherent Authority may be found wherever it would result in injustice towards plaintiff and defendant is somewhat at fault) Ratification Definition : Affirmance by person of (1) a prior act which did not bind him but (2) which was done or professedly done on his account whereby the act is given effect as if originally authorized by him. Ratification requires acceptance of the result with intent to ratify, and with full knowledge of all the material circumstances. Methods : (1) Implied Ratification through Inaction or Silence; (2) Implied Ratification Through manifest Acceptance Various Rules : (1) Must Otherwise Satisfy the Requirements of Agency, i.e. although unauthorized, agent must have been acting “on account” of principal. (2) Where there has been a material change in the circumstances there can be no
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This note was uploaded on 02/14/2008 for the course LAW 7060 taught by Professor Haas during the Fall '07 term at Yeshiva.

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Bierschbach F06 Corporations Outline - AGENCY LIABILITY OF...

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