Term
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Definition
| relationship authorizing one party (the agent) to act for and on behalf of the other party (the principal). |
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Term
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Definition
| Example: a real estate agent is hired by a home owner to find a buyer for the home. |
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Term
| Legal Relationships for Agency |
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Definition
Employment relationship
Independent contractor |
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Term
Employment relationship
(Legal Relationships for Agency) |
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Definition
one in which the employer has the right to control the physical conduct of the employee.
Example: a secretary is an agent of her boss and her boss can control certain aspects of her behavior, like how she conducts herself during a board meeting. |
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Term
Independent contractor
(Legal Relationships for Agency) |
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Definition
a person who contracts with another to do a particular job and who is not subject to full control of the other.
i. Example: screenwriters and actors are independent contractors when they work on movies. |
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Term
Formalities
(Creation of Agency) |
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Definition
| agency is a consensual relationship that may be formed by contract or agreement; agency may exist without consideration. |
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Term
| Duties of Agent to Principal |
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Definition
Duty of obedience
Duty of good conduct
Duty of diligence
Duty to inform
Duty to account
Fiduciary duty (loyalty): |
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Term
Duty of obedience
(Duties of Agent to Principal) |
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Definition
| agent must act in principal’s affairs only as authorized by the principal and must obey all reasonable instructions and directions. |
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Term
Duty of good conduct
(Duties of Agent to Principal) |
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Definition
| an agent has a duty to act reasonably and to avoid conduct that is likely to damage the principal’s interests or reputation. A breach makes the agent liable to the principal and subject to rightful discharge or termination. |
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Term
Duty of diligence
(Duties of Agent to Principal) |
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Definition
| agent must act with reasonable care and skill in performing his work. |
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Term
Duty to inform
(Duties of Agent to Principal) |
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Definition
| agent must use reasonable efforts to give the principal information relevant to the affairs entrusted to her. |
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Term
Duty to account
(Duties of Agent to Principal) |
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Definition
| agent must maintain and provide the principal with a true and complete account of money or other property that the agent has received or expended on behalf of the principal. |
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Term
Fiduciary duty (loyalty)
(Duties of Agent to Principal) |
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Definition
| agent owes a duty of utmost loyalty and good faith to the principal. |
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Term
| Duties of Principal to Agent |
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Definition
Compensation
Reimbursement
Indemnification |
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Term
Compensation
(Duties of Principal to Agent) |
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Definition
| a principal must compensate the agent as specified in the contract, or for the reasonable value of the services provided, if no amount is specified. |
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Term
Reimbursement
(Duties of Principal to Agent) |
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Definition
| the principal must pay back to the agent authorized payments the agent has made on the principal’s behalf. |
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Term
Indemnification
(Duties of Principal to Agent) |
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Definition
| the principal must pay the agent for losses incurred while acting as directed by the principal. |
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Term
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Definition
Lapse of time
Mutual agreement
Revocation of authority
Renunciation
Operation of law |
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Term
Lapse of time
(Termination of Agency) |
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Definition
| when agency is for a set period of time. |
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Term
Mutual agreement
(Termination of Agency) |
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Definition
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Term
Revocation of authority
(Termination of Agency) |
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Definition
| there can be limitations on the ability of the principal to revoke the authority of his or her agent |
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Term
Renunciation
(Termination of Agency) |
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Definition
| by the agent (the agent quits). |
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Term
Operation of law
(Termination of Agency) |
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Definition
| the death or incapacity of either the principal or the agent usually terminates the agency, unless the agent has a durable power of attorney for an incapacitated principal. |
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