Agency - Agency What is it Three-way relationship Principal...

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Agency
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What is it? Three-way relationship Principal Agent Third Party
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Elements Contract relationship Fiduciary relationship Contractual capacity Lawful purpose
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Types of Agency Relationships or not Employer/employee Principal/agent Principal/independent contractor
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Formation Express Implied Apparent Ratification Estoppel and by law
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Duties - Agent Performance Notice Obedience Loyalty Accounting
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While serving as outside auditors for the consulting firm of Stern, Stewart & Co., KPMG discovered how much money Stern, Stewart was earning from its financial management and incentive compensation consulting practice. KPMG sent six of its employees to a Stern, Stewart seminar to learn about this consulting practice. It then hired two of Stern, Stewart’s consultants and started its own competing business.
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Principal’s Remedies When the Agent Breaches a Duty The principal can recover damages caused by the agent’s breach. The agent must refund any profits made from the agency, if he breaches his duty of loyalty. The principal may rescind a transaction with an disloyal agent.
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Duties - Principal Compensation Reimbursement & Indemnification Cooperation Safe work environment
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Disclosure makes a difference!
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Termination Mutual agreement Lapse of defined time Fulfillment of purpose Occurrence of event Operation of law
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Effect of Termination Termination of the agency ends the agent’s power to act on behalf of the principal.
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