BLAW 371 UNL RUSSELL FINAL STUDY GUIDE
CH 14: Agency and the Employment Relationship
Agency Relationships - Answers -Agency is created when a person or company (agent)
agrees to act for or in place of another person or company (principal)
Agency Relationships Steps - Answers -1. The PRINCIPAL creates authority in an
agent
2. The AGENT receives authority and carries out the principal's instructions
3. THIRD PARTIES make CONTRACTS or are involved in TORTS with the agent
Agency Relationships Result - Answers -the principal is generally bound by the agent's
acts with a third party
Classification of Agents - Answers -Different agents have different kinds of authority
Kinds: Universal, General, Special, Agency coupled with an interest, Gratuitous,
Subagents
Universal Agents - Answers -Do all acts that can be legally delegated, i.e. General
Power of Attorney
General Agents - Answers -Execute all transactions in connection with a business, i.e.
top level managers
Special Agents - Answers -Execute a specific transaction or series of transactions, i.e.
a real estate agent
agency coupled with an interest - Answers -Agent has paid for the right to have
authority for a business
Gratuitous agent - Answers -No payment is made to the agent, i.e. a favor or a
volunteer
Subagents - Answers -Agent delegates authority to other agents
Creating an Agency - Answers -- Agreement of the Parties
- Implied or Express Ratification by the Principal
- Agency by Estoppel
- Agency by Operation of Law
by agreement of the parties - Answers -- May be oral or written
- The legal document called a power of attorney establishes agency and creates an
attorney-in-fact
, Implied or Express Ratification by the Principal - Answers -a principal accepts
responsibility for acts of an agent going beyond his/her authority (ratification)
Agency by Estoppel - Answers -Actions of the principal lead others to believe an
agency exists - the principal is estopped from denying the agency's existence
Agency by Operation of Law - Answers -- The agent acts beyond the authority granted.
- Necessity or emergencies create agency existence.
- The agent may do acts and bind the principal by operation of law.
Agent Acts for the Principal - Answers -- actual authority
- apparent authority
Actual Authority - Answers --Principal sends signals to the agent to do something with a
third party
-Express authority: Oral or written instructions create an authority
-Implied Authority: principal's conduct or trade customs create authority
Apparent Authority - Answers -- Principal sends signals to the third party that what the
agent does binds the principal
- There is appearance of authority that a third party could reasonably conclude
Principal's Duties to Agent - Answers --Cooperation
-Compensation
-Reimbursement
-Working Conditions
-Indemnify (Pay Back)
Cooperation - Answers -with the agent to fulfill the agency purpose
Compensation - Answers -money for services rendered (unless agent agreed to work
for free)
Reimbursement - Answers -of "reasonable" expenses (no reimbursement for agents
misconduct)
Working conditions - Answers -as required by law and meet legal obligations
Indemnify (pay back) - Answers -for legal liabilities incurred by the agent
Agent's Duties to the Principal - Answers -- loyalty
- obedience and performance
- reasonable care and skill
- account
- notify/inform
CH 14: Agency and the Employment Relationship
Agency Relationships - Answers -Agency is created when a person or company (agent)
agrees to act for or in place of another person or company (principal)
Agency Relationships Steps - Answers -1. The PRINCIPAL creates authority in an
agent
2. The AGENT receives authority and carries out the principal's instructions
3. THIRD PARTIES make CONTRACTS or are involved in TORTS with the agent
Agency Relationships Result - Answers -the principal is generally bound by the agent's
acts with a third party
Classification of Agents - Answers -Different agents have different kinds of authority
Kinds: Universal, General, Special, Agency coupled with an interest, Gratuitous,
Subagents
Universal Agents - Answers -Do all acts that can be legally delegated, i.e. General
Power of Attorney
General Agents - Answers -Execute all transactions in connection with a business, i.e.
top level managers
Special Agents - Answers -Execute a specific transaction or series of transactions, i.e.
a real estate agent
agency coupled with an interest - Answers -Agent has paid for the right to have
authority for a business
Gratuitous agent - Answers -No payment is made to the agent, i.e. a favor or a
volunteer
Subagents - Answers -Agent delegates authority to other agents
Creating an Agency - Answers -- Agreement of the Parties
- Implied or Express Ratification by the Principal
- Agency by Estoppel
- Agency by Operation of Law
by agreement of the parties - Answers -- May be oral or written
- The legal document called a power of attorney establishes agency and creates an
attorney-in-fact
, Implied or Express Ratification by the Principal - Answers -a principal accepts
responsibility for acts of an agent going beyond his/her authority (ratification)
Agency by Estoppel - Answers -Actions of the principal lead others to believe an
agency exists - the principal is estopped from denying the agency's existence
Agency by Operation of Law - Answers -- The agent acts beyond the authority granted.
- Necessity or emergencies create agency existence.
- The agent may do acts and bind the principal by operation of law.
Agent Acts for the Principal - Answers -- actual authority
- apparent authority
Actual Authority - Answers --Principal sends signals to the agent to do something with a
third party
-Express authority: Oral or written instructions create an authority
-Implied Authority: principal's conduct or trade customs create authority
Apparent Authority - Answers -- Principal sends signals to the third party that what the
agent does binds the principal
- There is appearance of authority that a third party could reasonably conclude
Principal's Duties to Agent - Answers --Cooperation
-Compensation
-Reimbursement
-Working Conditions
-Indemnify (Pay Back)
Cooperation - Answers -with the agent to fulfill the agency purpose
Compensation - Answers -money for services rendered (unless agent agreed to work
for free)
Reimbursement - Answers -of "reasonable" expenses (no reimbursement for agents
misconduct)
Working conditions - Answers -as required by law and meet legal obligations
Indemnify (pay back) - Answers -for legal liabilities incurred by the agent
Agent's Duties to the Principal - Answers -- loyalty
- obedience and performance
- reasonable care and skill
- account
- notify/inform
