QUESTIONS AND ANSWERS |
100% PASS
agency - ANSWER ✔✔created when a person or company (*agent*)
agrees to act for, or in place of, another person or company (*principal*)
who provides the agent with authority to do so
- an agent may create and bind a principal to contracts with third parties
as long as he acts within the scope of authority granted by the principal
- agent is granted certain authority to act for the principal
,common classifications of agents - ANSWER ✔✔universal agent,
general agent, special agent, agency coupled with an interest, gratuitous
agent, and subagent
universal agent - ANSWER ✔✔someone designated to do all acts
that can be legally granted to an agent
(usually given general power of attorney to do all business transactions
on behalf of the principal)
general agent - ANSWER ✔✔a person authorized to execute all
transactions connected with a certain business limited by the principal
ex. manager who runs all aspects of a hotel
special agent - ANSWER ✔✔an agent with authority to represent the
principal only for specific transactions, usually for a limited tim
agency coupled with an interest - ANSWER ✔✔an agent pays for the
right to have authority for a business
gratuitous agent - ANSWER ✔✔when a person volunteers with no
expectation of being paid for their services
,subagents - ANSWER ✔✔when principal authorizes an agent to
delegate authority to other agents
creating an agency - ANSWER ✔✔no formal procedure, but principal
must express desire for agent to act on their behalf and agent must
consent to do so
can be established:
- by agreement of parties
- implied/express ratification by the principal
- agency by estoppel
- agency by operation of law
implied/express ratification by the principal - ANSWER ✔✔a principal
accepts responsibility for the acts of an agent going beyond their
authority
agency by estoppel - ANSWER ✔✔actions of the principal lead
others to believe an agency exists (so the principal is estopped from
denying the existence of the agency)
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, ex. businesswoman's ex spent an extra $25k upon breaking up with her
because they were business partners and her actions gave her other
business partners reason to believe her ex was still employed yada yada
yada
agency by operation of law - ANSWER ✔✔created by necessity or
emergencies
ex 1. someone dying and passing agency to their son or something
which they can do by binding the principal (dead parent) by operation of
law
ex 2. if you're unable to talk to your boss who is on a business trip you
may have to make a split second decision without the delegated
authority (like if there's a hurricane coming so you spend money on
wood to board up windows)
power of attorney - ANSWER ✔✔authorizes a person or company to
act as an agent for a principal