Agency
What is agency
a fiduciary relationship that arises when the principal manifests assent to the agent and the agent agrees and acts on behalf of the principal.
What is ratification?
when an agent acts without authority, the P can still be bound to the contract if they ratify the transaction. ratification can be express (by word) or implied (by conduct).
What is Agent's Implied Warrant of Authority?
when an agent creates a K with a 3rd party and misrepresents the conveyance to the 3rd party, they will be a liable to the party and the 3rd party can sue for damages for loss caused by the breach of that warranty including loss of benefit expected from performance from the principal except: 1. principal ratifies; 2. Agent tells 3rd party that no warranty is given; 3. 3rd party knows that the person had no actual authority.
What is Duty of Loyalty?
An agent has a duty of loyalty. Must act for the principal's benefit, no self-dealing or personal enrichment, may not represent adverse party, cannot compete with principal, may not use confidential information and must safeguard property unless an agent receives informed consent. (must disclose all material facts and all info to the principal.)
How is a partnership created?
A partnership is a business created by 2 or more people by an express agrement- (writing with SOF) or by implied. A partnership is implied by receiving shares of profits unless it was received for dent, wages, rent, benefit, sale or some other type of payment.
what are the 3 types of agency relationships.
Actual authority
apparent authority
Inherent authority
A third party can bring a claim against an principal based on the theory of estoppel which means that they reasonably believed, by the appearance of the purported agent, that the agent had the authority to act on behalf of the principal.
What is the theory of Respondent Superior?
A principal can be liable for acts committed by the agent as long as the principal acted within his scope of employment. Such acts are within the scope of employment when its within the independent course of conduct and serves the purpose of the employer.
All agents must act with care, skill and diligence.
What are the rights & duties in a partnership?
Majority rule says that partners must act within the ordinary course of business.
Unanimity - any outside the OCOB is a violation unless stated in the Partnership agreement.
What is Agent to Disclosed Principal
Agent tells the 3rd party both the existence and identity of the principal, this no liability because they are not a party.
Frolic - an act that is outside the scope of employment.
Detour - an act that can be anticipated will be within the scope of employment.
What is a duty of obedience?
What are the standards of conduct for partners?
How is Apparent authority created?
Here, the Principal creates a fiduciary relationship by telling the 3rd party that the Agent will complete such acts.
What is Unidentified Principal?
Here, the agent tells the 3rd party that they are acting on behalf of a principal, but they do not identify who the prinicipal is, thus:
1. principal and the 3rd party are parties.
2. Agent and 3rd party are parties, unless otherwise agreed.
What is an Attorney-Client Relationship?
A form of agency relationship. the client is bound by his attorney's agreement to settle a lawsuit, even though the attorney may not have had express authority to settle, if the opposing party was unaware of any limitation on the attorney's apparent authority.
What are some remedies Principals and Agents can bring against each other?
Principal: Withhold compensation; seek damages for breach of K; Seek damages in tort; bring an action for an accounting; bring an action to recover secret profits.
Agent: Seek damages for Breach of K; Agent's lien.
Which Agency principles does Partnership rely on?
Actual and Apparent Authority
How is Inherent Authority created?
Here, inherent authority when the agent holds a position that would imply that they have the ability to act on behalf of the agent. (Agent is a CEO of a corporation.
What is Undisclosed Principal?
Here, the 3rd party doesn't know a principal exists, they think they are in a contract with just the agent directly.
1. Unless excluded by the K, Principal is a party.
2. Agent and 3rd party are in a K and have the same rights and liabilities and defenses against each other.
What is a Franchisor and Franchisee Relationship?
an agency relationship created when a franchisee commits acts that can create vicarious liability for the franchisor. The test is created by: 1. Control and 2. Scope of Employment.
How can partnerships increase capital?
They can require capital contribution from the partners.
How is the Partnership held for partner's actions?
Partnerships are liable for a partner's actionable conduct when partner acts in the OCOB of partnership agreement or with consent/authority.
Partners jointly/severally liable unless PS agreement states otherwise.
Judgment against a Partnership is not a judgement against a partner, and it may nor reach the assets of the partner unless the judgement is aganisnt the partner.
Partner can also have personal liability.