Class_8_AFM231posted

Class_8_AFM231posted - Class 8- AFM 231 Agency &...

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Class 8- AFM 231 Agency & Fiduciary Duties
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Discussion Points Agency Law Principal Agent relationship Duties Principal/Agent Third Party relationship Fiduciary Duties Aspects of duties and examples of relationship Fiduciary duties and…(contract, professional bodies) Codes of conduct Key takeaways
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Agency Rel’p Agency is the legal foundation for how organizations are able to act (along with related liability for how they act) It involves two relationships Principal and agent Principal/agent and third party Agency based on agreement Terminology used is actual authority
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Duties of Principal Duties of principle are limited but do exist Pay agent Help agent as necessary Reimburse agent for expenses and indemnify for losses Above assumes framework of actual authority already established
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Duties of Agent Greater number of duties for agent: Perform as per principal’s instructions The normal expectation is for personal performance Agent has a fiduciary responsibility to Principal What is it? Encompasses many ‘specific’ obligations This is a duty of ‘utmost good faith’. Critical element: it is imposed on you by virtue of the relationship i.e., you cannot change it or get out of it.
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Duties of Fiduciary Agent Duties of the Fiduciary Agent therefore include: Obey all lawful instructions Make full disclosure Avoid any conflict of interest (includes not acting for two principals normally – see Raso Case p. 303) Account for funds Don’t make secret commissions Etc.
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Power of Attorney What is a power of attorney? Takes different forms- general, specific, personal care, etc. Normal power of attorney is revoked by incapacity. Now can have ones that are specifically written to continue on. Also may and often should limit the power of attorney to specific actions. Why ‘should’?
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Note Note in text the discussion of actual and apparent authority . It is the latter that leads to agency by estoppel (when the apparent authority goes beyond the actual). Agency by ratification – possible but not common Real estate ‘agents’: not a comprehensive agency relationship. Why?
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Contract Liability in Agency Legal Concepts that impact Principal liability to third parties Agency by actual authority Agency by estoppell • Agency by apparent authority Agency by ratification Undisclosed principal • Agent infers neither acting as agent or principal- principle normally liable (heavily criticized) Principal is acknowledged but anonymous- principal liable
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This note was uploaded on 12/19/2010 for the course AFM 231 taught by Professor Briggs during the Winter '09 term at Waterloo.

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Class_8_AFM231posted - Class 8- AFM 231 Agency &...

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