Week 9 Slides - Modified(2).ppt

Week 9 Slides - Modified(2).ppt - Chapter 7 Dealing With...

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Chapter 7 Chapter 7 Dealing With Agents Dealing With Agents Prepared by Nick James, Bond Unviersity Updated by Athula Pathinayake, Deakin University Modified by Dr Nguyen Tan Son, RMIT International University Vietnam
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Chapter 7 | Dealing With Agents 1. Getting someone else to do it 2. Scope of authority 3. The agent’s duties 4. The agent’s entitlements 5. Liability of principal and agent 6. Concluding the agency
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Getting someone else to do it Chapter 7 Dealing With Agents
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Agency Do you think that a business owner is likely to do everything personally ? A business owner will have workers who, on their behalf, deal with ‘third parties’ such as suppliers, customers, other employees and other businesses. A business owner will be legally bound by any statements, contracts or payments made (and possibly even torts and crimes committed) by a worker authorised to act on the business owner’s behalf.
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Agency Agency law involves three people: Agent: the person who acts on behalf of another. Principal: the person the agent is acting for . Third party: the person who the agent brings into a legal relationship with the principal. Note: The principal may be an individual or a corporation. The same is true of the agent and the third party.
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The Agency Relationship Figure 7.1
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Examples of principal and agent Employer and employee Seller and auctioneer Client and solicitor / real estate agent / stock broker Corporation and director Partner and partner
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Types of agent Agents can be classified as UNIVERSAL AGENTS, GENERAL AGENTS, and SPECIAL AGENTS. A universal agent has unrestricted authority to act on behalf of the principal, and can do almost anything in the principal’s name that the principal could do themselves. For example, a person may be travelling or living overseas for a while. Thus, that person may appoint a relative as a universal agent and authorize the relative to sign any document and make any decision on his/her behalf.
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General agent A general agent has broad but not unrestricted authority to act on behalf of the principal. For example, a university teacher who owns a big coffee shop, but is very busy with teaching. He can appoint a manager as his general agent to run the coffee shop. The agent is authorized to do everything necessary to manage the shop. However, it does not mean that the agent can make other decisions that are not relevant to operating the coffee shop, e.g., buying and selling the principal’s property.
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Special Agent A special agent has limited authority to act on behalf of the principal, often in relation to a single transaction. For example, a house owner may be trying to sell his/her house; at the same time, he/she will be taking an overseas holiday. The house owner may appoint a real estate agent to sell the house. The real estate agent has the authority to sign the contract to sell the house on behalf of the owner. However, the real estate agent does not have the power to enter into any other contract in the name of the owner such as renting a new house.
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Scope of authority Chapter 7 Dealing With Agents
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