Exam Three Study Guide

Exam Three Study Guide - Exam3Review 31/03/201112:31:00...

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Exam 3 Review 31/03/2011 12:31:00 EXAM #3 REVIEW Chapter 18 – Agency Formation and Termination - What is it?- relationship formed by mutual consent, the effect of which is to grant somebody authority to act on your behalf, even to the extent of bring you to contracts and perhaps - What is the effect? - What’s the difference between an employee and an I.C. - What is the most important factor?- degree of control exercised by the employer liability for tax and respondeat superior - How is one formed? Consent. You do not have to have consideration - what is required? - who can be an agent? - capacity, we don’t care if agents have capacity, but principal must have capacity - express, implied (broader than express, would include things that would be reasonable for agent to do given position, title, position, etc) incidental (emergency authority) ratification- having to ratify an unauthorized act- principal does not have to ratify a contract made under apparent authority, the remedy is the right of indemnification. apparent (estoppel)- the authority that a principal leads a 3 rd party to believe that an agent has. Principal is still liable to the 3 rd party. - Agent’s duties- duty of performance- good faith, etc Notification- duty to provide info that comes about as agent. Principal always treated as if notified even if not.
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accounting- has to keep good records indemnification Principals duties - performance, notification, accounting - Principal’s duties - compensation, reimbursement/indemnification, cooperation - Termination Act of parties- mutually rescind Operation of Law- death, insanity, bankruptcy, change circumstances, war Wrongful- right vs. power. Always have the power to terminate an agency relationship, but if terminated wrongfully without the right you are liable for damages that flow from it. Specific performance is never available. Impossibility- desctruction of subject matter, loss of qualification, illegality Notice- o Direct notice to the parties that have dealt with agent o direct or constructive to those who had knowledge of agency o no notice for those who had no idea of agency Chapter 19 – Liability of Principals, Agents, and IC’s Agent’s Duty of Loyalty- fiduciary relationship Self dealing- can’t award self contract Usurping an opportunity- should belong to principal
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Competing with Principal- secretly Misuse of confidential info Dual Agency- can represent both sides as long as both consent Liabilities for Torts Agent’s negligence- hold principle liable for agents negligence as long as act is committed within the scope of employment - scope of employment- if arises out of performance out of agent’s duties frolic v. detour- o frolic- outside of scope of employment- agent is liable. Substantial departure from. o
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Exam Three Study Guide - Exam3Review 31/03/201112:31:00...

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