Chapter 37 - Agency - Chapter 37 Agency I. Nature of the...

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Chapter 37 – Agency I. Nature of the Agency Relationship a. Definitions and Distinctions i. Agency: 1. Relationship based on an express or implied agreement by which one person, the agent, is authorized to act under the control of and for another, the principal, in negotiating and making contracts with third persons a. The acts of the agent obligate the principal to third persons and give the principal rights against third persons ii. Employees and Independent Contractors: 1. Control and authority are characteristics that distinguish ordinary employees and independent contractors from agents a. Employees: i. An agent is distinguished from an ordinary employee who is not hired to represent the employer in making contracts with third persons 1. Is possible for the same person to be both an agent and an employee b. Independent Contractors: i. Bound by a contract to produce a certain result 1. Actual performance of the work is controlled by the contractor, not the owner ii. An agent or employee differs from an independent contractor in that the principal or employer has the right to control the agent or employee, but not the contractor, in the performance of the work b. Classifications of Agents i. Special Agent:
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1. Authorized by the principal to handle a definite business transaction or to do a specific act a. Example, authorized to purchase a house for another ii. General Agent: 1. Authorized by the principal to transact all affairs in connection with a particular type of business or trade or to transact all business at a certain place a. Example, person appointed as manager of a store iii. Universal Agent: 1. Authorized by the principal to do all acts that can be delegated lawfully to a representative a. Arises when a person absent because of being in the military service gives another person a blanket power of attorney to do anything that must be done during the absence c. Agency Coupled with an Interest i. An agent has an interest in authority when consideration has been given or paid for the right to exercise authority 1. Example, collecting rents due to the borrower of a loan for the
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This note was uploaded on 04/24/2011 for the course MGMT 354 taught by Professor Staff during the Spring '08 term at Purdue University-West Lafayette.

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Chapter 37 - Agency - Chapter 37 Agency I. Nature of the...

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