MGMT 643 - Agency Law
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Created by:
cowboys_84 Plus on September 26, 2011
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31 terms
Terms | Definitions |
|---|---|
 5 Things to Know about Agency Law | 1) How is principal-agency relationship created? 2) What is power of attorney? What are the types? 3) What contractual liability can agent create for his principle? 4) What tort liability can agent create for his principle? 5) What is an independent contractor? |
| Principle (P) | ✦ Person who has somebody else work (act) for him/her ✦"employer/boss" |
| Agent (A) | ✦ Person who acts for another ✦"employee/worker" |
| How is principal-agency relationship created? | 1) Employment 2) Powers of Attorney |
| Types of Powers of Attorney | 1) General 2) Special 3) Durable |
| General P of A | ✦ Agent authorized to do everything Principle could legally do while Principle could legally do it ✦ If they aren't able to do something, then you can't act for them |
| Special P of A | ✦ Agent authorized to do only specified things for Principle while Principle could legally do them ✦ IRS Form 2848 |
| Durable (General or Special) P of A | ✦ Agent can continue to act for Principle even when Principle couldn't legally act for himself/herself ✦✦ State of Texas ✦✦ |
| Duties of Principle to Agent | ✦ Fiduciary Duty ✦ Follow the Rules - MLB - drug testing & replay |
| Fiduciary Duty | Utmost loyalty, trust, and good faith in dealings between P and A |
| Duties of Agent to Principle | ✦ Fiduciary Duty 1) Obedience - if legal 2) Reasonable care 3) Loyalty 4) Duty to account for $ 5) Duty to notify regarding changed customers |
| Termination of P of A | ✦ By acts of parties ✦ By operation of law |
| Termination by Acts of Parties | 1) Completion 2) Revocations 3) Quit 4) Time |
| Termination by Operation of Law | 1) Incapacity? 2) Death? ✦ If Durable Gen or Special = not terminated ✦ If Plano Gen or Special = yes, terminated |
| Can Agent Contractually Obligate Principle? | Yes! If A had the authority to enter into the contract |
| 2 Types of Authority | 1) Actual 2) Apparent |
| Actual Authority | ✦ Relationship between Principle and Agent. Agent acts under Principle's authority. ✦ Vertical Authority 1) Express - clear, unequivocal authorization 2) Implied - everything reasonably and customarily necessary |
| Apparent Authority | ✦ Relationship between Agent and 3rd Parties (others) ✦ Horizontal Authority ✦Principle is contractually bound if 3rd party could reasonably believe Agent was authorized to act for Principle - even if they weren't |
| Ratification | Even if Principle didn't authorize Agent to act, Principle still bound if Principle ratifies Agent's actions |
| Notice to A = | = Notice to P ✦ If A's receipt of notice is within A's actual or apparent authority |
| Contractual Liability of Agent to 3rd Party - Is A personally liable to 3rd party under contract negotiated for P? | ✦ Depends 1) Disclosed Principal 2) Undisclosed Principal |
| Disclosed Principal | ✦ 3rd Party knows or reasonably should have known A is P's agent ✦ Agent has no liability (personal) for broken contract |
| Undisclosed Principal | ✦ 3rd Party doesn't know or reasonably shouldn't have known A is P's agent ✦ A is personally liable for broken contract |
| Tort Liability of P for A's Actions | ✦ Tort - Injury to person or damage to another's property which is compensable by money damages if the defendant was wrong |
| Vicarious Liability or Respondeat Superior | Principle is not liable because of what Principle did, but because P's Agent did something for which P is held responsible |
| GENERAL RULE | Employer (P) IS LIABLE for a tort committed by his or her Employee (A) if the tort was WITHIN THE SCOPE OF THE EMPLOYEE"S EMPLOYMENT |
| Employer-Employee or Independent Contractor? | ✦ If Employer-Employee = GENERAL RULE ✦ If Independent Contractor = then "boss" is not liable for independent contractor's actions |
| Revenue Ruling 87-41 | ✦ When is "boss" responsible for paying employment taxes on workers ✦ 20 Factor Test - but not 1 factor is determinate |
| 20 Factor Test | 1) Instructions, 2) Training, 3) Integration, 4) Services Rendered Personally, 5) Hiring, Supervising, & Paying, 6) Continuing Relationship, 7) Set Hours of Work, 8) Full-Time Required, 9) Doing Work on Employer's Premises, 10) Order or Sequence Set, 11) Oral or Written Reports, 12) Payment by Hour, Week, or Month, 13) Payment of Business and/or Traveling Expenses, 14) Furnishing Tools and Materials, 15) Significant Investment, 16) Realization of Profit or Loss, 17) Working for More Than One Firm at a Time, 18) Making Service Available to General Public, 19) Right to Discharge, 20) Right to Terminate |
| What is Scope of Employment? | ✦ Work expressly directed to be performed ✦ Work reasonably incidental to work expressly directed |
| Commuting? | ✦ Texas - GENERAL RULE - person is not within scope of employment while commuting to and from work |
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