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Chapter 28 Notes

Chapter 28 Notes - Ch 28 Agency a relationship between two...

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Ch. 28 Agency – a relationship between two parties in which one party agrees to represent or act for the principal Fiduciary – person having a duty to act primarily for another’s benefit in matters connected with the undertaking Employer-Employee relationships Employer-Independent contractor relationships o Independent contractor – one who works for, and receives payment from, an employer but whose working conditions and methods are not controlled by the employer. Determining employee status o Criteria used by the courts o Criteria used by the IRS o Employee status and “works for hire" How agency relationships are formed No writing requirements and no consideration needed Agency by agreement Agency by ratification o Ratification – the act of accepting and giving legal force to an obligation that previously was not enforceable Agency by estoppel o Appearance of an agency where third person reasonably believed relationship existed Agency by operation of law Duties of agents and principals Agent’s duties to the principal o Performance: Reasonable diligence and skill in performance o Notification: Of matters that come to attention concerning the subject matter o Loyalty: Act solely for the benefit of principal o Obedience o Accounting Principal’s duties to the agent o Compensation: Agent expects payment o
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