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LAW 2: Test 1
Chapter 31, 32
53
Law
01/09/2011

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Term
Agency Relationship
Definition
Involves 2 parties, the agent agrees to represent or act for the principal
Term
Agent
Definition
first party in an agency, agrees to act or represent for another party
Term
Principal
Definition
-Hires agent to act or represent on their behalf.
-Has control over the agent's conduct in matters it entrusts to the agent.
Term
Agency
Definition
the fiduciary relation that results from the manifestation of consent by one person to another that the other shall act in his or her behalf other so to act
Term
Fiduciary
Definition
-(n) refers to a person having a duty created by his or her undertaking to act primarily for another's benefit in matters connected with the undertaking
-(adj) the relationship involves trust and confidence
Term
Independent Contractor
Definition
-a person who contracts with another to do something for him but who is not controlled by the other nor subject to the other's right to control with respect to his physical conduct in the performance of the undertaking. He may or may not be an agent.
-works for, and receives payment from, an employer,
-whose working conditions and methods are not controlled by the employer
-whose acts and omissions the employer is not liable
Term
Forming a Agency Relationship
Definition
-agreement of parties
-ratification
-estoppel
-operation of law
Term
Estoppel
Definition
the principle that precludes a person from asserting something contrary to what is implied by a previous action or statement of that person or by a previous pertinent judicial determination
Term
Agency by Agreement
Definition
the agency relationship is formed through express consent (oral or written) or implied by conduct
Term
Agency by Estoppel
Definition
the principal causes a third person the believe that another person is the principal's agent, and the third person acts to his or her determinant in reasonable reliance on that belief
Term
Agency by Operation of Law
Definition
the agency relationship is based on the social duty or formed in emergency situations when the agent is unable to contact the principal and failure to act outside the scope of the agent's authority would cause the principal substantial loss.
Term
Agency by Ratification
Definition
the principal either by act or by agreement ratifies the conduct of a person who is not in fact an agent.
Term
Performance
Definition
An implied condition in every agency contract is the agent's agreement to use reasonable diligence and skill in performing the work.
Term
Notification
Definition
An agent is required to notify the principal of all matters that come to his attention concerning the subject matter of the agency.
Term
Loyalty
Definition
An agent has the duty to act solely for the benefit of his or her principal and not in the interest of the agent or a third party.
Term
Obedience
Definition
When an agent is acting on behalf of the principal, the agent has a duty to follow all lawful and clearly stated instructions given by the principal.
Term
Accounting
Definition
An agent has the duty to keep and make available to the principal an account of all property funds received and paid out on behalf of the principal.
Term
Agent's Duties to the Principal
Definition
-Performance
-Notification
-Loyalty
-Obedience
-Accounting
Term
Principal's Duties to the Agent
Definition
-Compensation
-Reimbursement and Indemnification
-Cooperation
-Safe Working Conditions
Term
Compensation
Definition
The principal has a duty to pay the agent for services rendered
Term
Reimbursement and Indemnification
Definition
The principal has the duty to indemnify an agent for liabilities incurred because of authorized and lawful acts and transactions.
Term
Indemnification
Definition
Compensation
Term
Cooperation
Definition
a principal has the duty to cooperate with the agent and to assist the agent in performing his or her duties. The principal myst do nothing to prevent that performance.
Term
Exclusive Agent
Definition
When a principal grants an agent exclusive territory.
Term
Safe Working Conditions
Definition
Common law requires the principal to provide a safe working premise, equipment, and conditions for all agents and employees. The principal also has the duty to inspect working areas and to warn agents and employees about any unsafe situations.
Term
Express Authority
Definition
Authority declared in clear, direct, and definite terms.
Term
Equal Dignity Rule
Definition
if the contract being executed is or must be in writing, then the agent's authority must also be in writing
Term
Power of Attorney
Definition
a written document an is usually notarized
Term
Notary Public
Definition
a public official authorized to attest to the authenticity of signatures
Term
Implied Authority
Definition
to do what is reasonably necessary to carry out express authority and accomplish the objectives of the agency.
Term
Apparent Authority
Definition
when the principal, either by word or action, causes a third party reasonably to believe that the agent has authority to act, even though the agent has no express or implied authority
Term
Ratification
Definition
occurs when the principal affirms, or accepts responsibility for, an agent's unauthorized act.
Term
Disclosed Principal
Definition
a principal whose identity is known by the third party at the time the contract is made by the agent.
Term
Partially Disclosed Principal
Definition
a principal whose identity is not known by the third party, but the third party knows that the agent is or may be acting for a principal at the time the contract is made
Term
Undisclosed Principal
Definition
a principal whose identity is totally unknown by the third party, and the third party has no knowledge that the agent is acting in an agency capacity at the time the contract is made.
Term
E-Agent
Definition
a semiautonomous computer program that is capable of executing specific tasks.
Term
Respondeat Superior
Definition
the principal-employer is liable for any harm caused to a third party by an agent-employee within the scope of employment.
Term
Vicarious Liability
Definition
(indirect liability)
-liability without regard to the personal fault of the employer for torts committed by an employee in the course or scope of employment.
Term
Termination of Agency
Definition
-Act of the parties
-Operation of Law
Term
Termination by Act of the Parties
Definition
-Lapse of Time
-Purpose Achieved
-Occurrence of a Specific Event
-Mutual Agreement
-At the option of One Party
-Notice of Termination
Term
Termination by Operation of Law
Definition
-Death or Insanity
-Impossibility
-Changed Circumstances
-Bankruptcy
-War
Term
Fiduciary Duty
Definition
A duty arising from the trust and confidence placed in a fiduciary by those on whose behalf and for whose benefit she acts.
Term
Employee
Definition
-who works for, and receives payment from, an employer
-whose working conditions and methods are controlled by the employer
-for whose acts and omissions occurring in the scope of employment the employer is liable.
Term
"Works for Hire"
Definition
The Copyright Act of 1976 gives the employer the copyright in any work its employee creates (1) within the scope of her employment and (2) at the employer’s request.
Term
Determining Employee Status
Definition
-Control
-Distinct Occupation
-Supervision
-Tools
-Duration
-Payment
-Skill
Term
Agent's Remedies
Definition
-Withhold further performance
-demand an accounting
Term
Principal's Remedies
Definition
-Constructive Trust
-Avoidance
-Indemnification
Term
Constructive Trust
Definition
Anything an agent obtains by virtue of the agency relationship belongs to the principal; therefore, a principal may sue to recover any benefits retained by the agent.
Term
Avoidance
Definition
In the event that the agent breaches her contract with the principal, the principal may elect to avoid any contract he entered into with the agent.
Term
Emergency Powers
Definition
When an unforeseen situation demands action to protect or preserve the property and rights of the principal, but the agent is unable to contact the principal, the agent has emergency authority to act on the principal’s behalf.
Term
"Frolics"
Definition
A principal is not liable for the acts of an agent who substantially departs from the principal’s business.
Term
Dangerous Conditions
Definition
A principal is charged with knowledge of any dangerous conditions discovered by an agent and pertinent to the agency regardless of whether the agent actually informs the principal of the condition.
Term
Borrowed Servants
Definition
A principal/employer who lends an agent/employee to another is liable for the agent/employee’s acts to the extent that the principal/employer retains the primary right to control the borrowed servant.