A1 Business and Technical College Business Law Discussion

Review Ackerman v. Sobol Family Partnershipon pages 113-114 of your text.  Respond to any of the following questions for your initial post to the Discussion Board.  In your response indicate which question you are responding to by cutting and pasting the text of the question directly before your response.

2/25/2018
Chapter 33
Agency Formation and Duties
Copyright © 2017 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
Overview
• LO33-1: What is agency law?
• LO33-2: How is an agency relationship
created?
• LO33-3: What are the different types of
agency?
• LO33-4: What are the different types of
agency relationships?
• LO33-5: What are the duties of the agent and
principal?
• LO33-6: What are the rights and remedies of
the agent and principal?
33-2
Agency Law
• Agency: Relationship between principal
and agent
• Agent: One authorized to act for/on behalf
of principal
• Principal: One who hires agent to
represent him/her
• Fiduciary: One with duty to act primarily
for another person’s benefit
33-3
1
2/25/2018
Creation of Agency Relationship
• Expressed agency: Agency formed by making written/oral
agreement
• Power of attorney: Document giving agent authority to sign legal
documents on behalf of principal
• Durable power of attorney: Power of attorney intended to continue
to be effective/take effect after principal incapacitated
• Agency by implied authority: Agency formed by implication, through
conduct of parties
• Agency by estoppel: Agency formed when principal leads third party
to believe that another individual serves as his/her agent (although
principal had actually made no agreement with purported agent)
• Agency by ratification: Agency that exists when individual
misrepresents himself/herself as agent for another party, and
principal accepts/ratifies unauthorized act
33-4
Agency By Ratification
Requirements
• Individual must misrepresent himself/herself as agent for
another party
• Principal accepts/ratifies unauthorized act
• Principal has complete knowledge of all material facts
regarding contract
• Principal must ratify entirety of agent’s act
33-5
Agency Relationships
• Agency relationship: Fiduciary relationship (relationship of
trust) in which agent acts on behalf of principal
• Principal-agent relationship: Employer hires employee to
enter into contracts on behalf of employer; parties have
agreed that agent will have power to bind principal in contract
• Employer-employee relationship: Employer hires employee to
perform certain tasks; employer has right to control conduct
of employees
• Employer-independent contractor relationship: Employer hires
persons (other than employee) to conduct some sort of task;
employer has no control over details of conduct of
independent contractor
33-6
2
2/25/2018
Independent Contractor or
Employee?
• Does worker engage in distinct
occupation/independently established business?
• Is work done under employer’s supervision, or does
specialist without supervision complete the work?
• Does employer supply the tools?
• What skill is required for the occupation?
• What is the length of time for which worker employed?
• Is worker a regular part of the employer’s business?
• How is worker paid?
33-7
Principal and Agent Duties
• Principal’s duties to agent:
•
•
•
•
Compensation
Reimbursement and indemnification
Cooperation
Safe working conditions
• Agent’s duties to principal:
•
•
•
•
•
Loyalty
Notification
Performance
Obedience
Accounting
33-8
Principal and Agent
Rights and Remedies
• Principal’s rights and remedies against agent:
• Constructive trust
• Avoidance
• Indemnification
• Agent’s rights and remedies against principal:
• Tort and contract remedies
• Demand for an accounting
• Specific performance
33-9
3