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Terms in this set (13)
The discretion and ability of an Agent to bind a Principal. Liability of Principal to 3rd parties for acts of an Agent may be shown by proof disclosing:
1. Express Authority/Actual Authority
2. Implied Authority
3. Apparent Authority
is where a Principal explicitly delegates duties to an Agent. Where there is actual authority to bind a Principal, the Principal will be liable.
is actual authority that the Principal intended the Agent to possess and includes such powers as are practically necessary to carry out delegated duties. Where there is implied authority, a Principal will be liable.
*Prior course of conduct between agent and principal.
Manifestation by the Principal that leads a 3rd party to reasonably believe that Agent has authority, even though there may be no authority from Principal to Agent.
Undisclosed/Partially Disclosed Principal
If a 3rd Party to a transaction has notice that an Agent is or may be acting for a Principal but has no notice of the Principal's identity, the Principal for whom the Agent is acting is Partially or Undisclosed.
-Liability of an Agent:
It is duty of the Agent (to avoid personal liability on the contract entered into by the Agent on behalf of the Principal) to disclose not only that he is acting in a representative capacity, but also the identity of the Principal.
Agency - Duties
Duties an Agent owes the Principal.
1. Duty to account for profits arising from employment
2. Duty not to act as, or on account of, an adverse party without Principal's consent
3. Duty not to compete with Principal
4. Duty to deal fairly with the Principal in all transactions.
5. Duty to deal openly with the Principal
6. Duty to fully disclose matters affecting the Principal's business.
an association of 2 or more persons engaged in business as co-workers for profit, unless the company is another entity by law. To determine the existence of a partnership, courts look at:
-intent of parties
-right to share in profits
obligation to share losses
-ownership and control
-community of power in admin
-language of agreement
-conduct of parties to 3rd parties
-rights of parties on dissolution
an association between 2 or more persons or entities to engages in business for a limited scope. Joint adventurers owe each other the same fiduciary duties as partners.
Where a partnership agreement is freely negotiated and defines the partners' rights and responsibilities, the court will enforce the parties' intent
Partnership - Duties
Duty of Loyalty: Each partner must refrain from dealing adversely, and from competing.
-A partner may plan to compete with his Partnership as long as he does not breach a Fiduciary duty owed to the Partnership.
Duty of Care: a Partner must refrain from engaging in grossly negligent or reckless conduct, intentional misconduct, or a knowing violation of the law.
Duty of Good Faith: Must discharge duties consistent with obligations of good faith and fair dealing. Bad faith occurs where there is dishonesty of belief or purpose by a partner.
Duty of Disclosure: A partner must render on demand true and full information of all things affecting the partnership.
Partnership - Rights of Partners in Management
Partners - Every partner is an Agent of the partnership for the purpose of its business, and all partners are jointly and severally liable for actions and obligations of the partnerships.
-equal rights to management and control of business; one can only become a partnership with the consent of all partners
-a partner is not entitled to remuneration for services performed for the partnership, unless winding up
-a decision regarding the ordinary business conduct may be decided by a majority, however, act outside ordinary and amendments to partnership agreement needs unanimous consent.
Agency - Ratificaiton
the affirmance by a Agent of a prior act which did not bind him but which was done or professedly done on his account.
Ratification requires acceptance of the act with the intent to ratify, and with full knowledge of all material circumstances
Agency - Agency by Estoppel
Duty of a proprietor to take reasonable care and vigilance to protect customers from loss by deceptions of apparent salesmen otherwise a principal would be able to escape liability of consequential loss sustained by a custom on the principal's premises.
(subset of apparent authority)
-Principal authorizes Agent for a transaction
-Agent makes misrepresentation to 3rd party
-Agent and Principal are estopped from denying or escaping the misrepresentation, bound by the initial promise.
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