TAMU-Swim MGMT 209 Chapter 4 – Flashcards

A legal agreement of the parties to do something not obligated to do or to refrain from doing something legally entitled to do. ____ consist of a promise, but not all promises are ___. (promises-manifestation of intent to do or not do something)

Apparent intention of a party to enter into a contract is determined by the objective, outward manifestation of his or her assent as it would be interpreted by a reasonable person, rather than by that party's secret subjective intentions. What would a reasonable person under like situations mean? Objective Factors include: 1). Conduct of the party 2). The words spoken or written by the party 3). The circumstances surrounding the transactions Contracts will be judged by the Objective Standard

The apparent intention of the parties to a contract is determined by what a reasonable person would have done in a similar situation.

Type of Contracts Express: Terms of the agreement are fully and explicitly stated in words, written or orally. Ex). Sign lease for apartment or girl next door offers to wash car for $5 and you accept, express oral contract. Implied: All the facts are there but they are implied by all of the actions of the parties. Inferred from the conduct of the parties. Ex). Sitting in a barber chair/getting gas at shell. Whether expresses or implied, if all elements to contract are present, it is forceable - based on OBJECTIVE STANDARD of what a reasonable person would do it a situation.

"Sort of" or almost a contract but something is missing that makes it not a true contract. One party gets the advantage of a contract while the other is being taken advantage of, so the aggrieved party can throw himself a the mercy of the court and beg the court, to supply the missing element of the contract by law and then enforces the contract. Ex). Yard work without a permit. COURT DOES NOT BAIL YOU OUT OF DUMB CONTRACTS (1st Rule of Thumb)

Unconditional: A duty of performance is absolute when the only occurrence necessary to require performance is the passage of time. It is ABSOLUTE. Must perform contract. Conditional: No duty to perform if condition not met. Duty of performance is conditional if something other than the passage of time must occur before performance is required. THREE Types: Conditional SUBSEQUENT, Conditional PRECEDENT, Conditional CONCURRENT

You enter into a perfectly valid good contract that ends because of a stated event, goes on until something happens. A legal trigger that must occur before your obligation t enter a contract ever occurs.

Contract goes on so long as something does not occur. Something has to happen or it never happens, contract never starts.

You do not do something until I do something, I don't do something until you do something. Ex). House closing; Don't sell if won't buy, won't buy if don't sell.

Classification depends on what the offeree must do to accept the contract. OFFEROR- Party making to offer. OFFEREE-Party to whom the offer is made. Only people who can accept the offer. PROMISOR- Promise to do or no do something. Offeror is also this. PROMISEE- Party to whom promise is made. Offeree is also a promisee when they promise to do the job and they are promised to be paid. Bilateral: "Promise for a promise". Mutual exchange of legally enforceable promises. 2 promisors. ENFORCED once promise is made by the offeree Ex). House painter offers to paint house and owner promises to pay. Unilateral: "Promise for an act". One promisors. ENFORCED once performance is performed by the offeree. Offeree accepts by total performance; MAJORITY RULE. Can quit if they want to. MINORITY RULE: Have to pay offeree for ANY performance. ACCEPTANCE: By performing work. Common Law-At any time prior to complete performance the offeror can change his or her mind and legally stop the offeree performance and owe the offeree no legal obligation. Minority Rule: Substantial amount of work complete, can't stop work OR must pay for work done when stop work that has begun. Ex). House owner states that he will pay the painter if he paints his house.

Executory: Not fully performed by either party. Isn't executed; up to the point that it's executed, it is executory. Partially executed (executory): one party has completed work, other party has not. Executed: Contract has been fully performed by all parties. Finished, done, completed by all of the parties.

Valid: Perfectly, legal, good, enforceable contract. All elements are present. Void: No legal existence, law does not recognize it. Not a contract at all. Something missing. Ex). If someone hires you to kill someone, it is an illegal contract and void. Can't be enforced by law. EXCEPTION: Judge can supply missing element if it is a quasi contract. Voidable: Valid contract able to be voided by parties. One or both parties can decided legally not to enter into the contract, but it is their option, not a requirement (contract with a minor). Unenforceable Contracts: Valid contract that cannot be enforced because of certain legal defenses. . Used to be perfectly valid, but something occurred (usually law changes). Ex). When drinking age was 18, you entered into contract that someone delivers beer every week. Law changed to 21. Contract unenforceable now because of law. You still owe money for the years you legally bought beer.

Breach of contract is the most form of lawsuit!!! Contract law is defined entirely by common law but often supplemented with state statutory law. First step in enforcement is to see if there is an actual contract to enforce, and to create a contract there are required elements.

-Simply, a contract is a special type of agreement between parties that is legally enforceable. -States list these elements in different ways. -Person attempting to enforce contract must prove existence of first two elements. -Defendant can prove non-existence with one of the last four elements missing. 1). Agreement a). Offer 1). Intent 2). Definite 3). Communication to the offer b). Acceptance 2). Consideration (mutual agreement) 3). Capacity 4). Legality 5). Genuine & Real Asset to the Contract 6). Some contracts must be in writing

Mutual assent or "meeting of the minds". Mutual understanding that is not mistaken. ONLY offeree can accept. Broken down in two parts: 1). Offer: A promise that expresses the willingness of a party , known as the offeror, to enter into a enforceable agreement regarding a particular subject. 3 Elements to an offer. 2). Acceptance:

ALL are required. 1). Intent: Offeror means what they say. Definite intent to bind parties to contract. Clear manifestation of that intent. Determined by OBJECTIVE STANDARD-would a reasonable person have viewed the offer as intent to be bound? DEFINED in Texas case law as "an expression of the terms with sufficient certainty so that there is no doubt regarding the parties intentions. 2). Definite terms and conditions: Terms of the offer must have sufficient detail so other party and Court is reasonably certain of terms. General understanding of what to do or not do so a reasonable person knows. Court CANNOT supple the quantity of terms, must be there and determinable by what is said. 3). Communication to the offeree: Offeree must know of offer before it can accept it. Ex). Reward-You see a dog in the street and grab it and return to address thats on the collar and gives to owner. Later you see "LOST DOG-$500 Reward". You later say "I wanna collect it" because you did not know about that.

Preliminary Negotiations: Not necessarily an offer. Usually the start of an offer. Ex). "Would you consider selling your business?" Advertisements: Invitation to buyer to come in and negotiate with the seller. Some can be offers. Auctions: If you offer something for sale, you DO NOT have to sell it. Absolute Auction (auction without recourse): Ebay, must sell something if you say you will sell it.

1). Termination by A Person a). Revocation b). Rejection c). Lapse of Time d). Counteroffer 2). Termination by Law a). Intervening Illegality b). Subject matter of offer is destroyed c). Offeror or offeree becomes insane, dies, etc.

Termination by A Person Is where the offeror takes back or revokes offer PRIOR to the acceptance by the offeree and , like the offer, it must be communicated to the offeree and not effected until so. Once the offeree accepted, you have a legally binding contract under common law. You DO NOT revoke a CONTRACT, you only revoke an OFFER.

Termination by A Person Offeree says no, contract is dead. Once you say no, the offer is also dead and terminated and consequently cannot be accepted.

Terminated by people AND by law. Stated period of time without acceptance the contract. If no time is stated, then when a reasonable time passes. Ex). Selling tomatoes will have a shorter time period than selling a car. Open Contract: Some form of payment to keep the OPTION of accepting the contract available to the offeree, makes the contract irrevocable for the time period agreed upon and paid for.

Termination by A Person It is a rejection but new offer. Offeree is now the offeror. Ex). I won't pay you $10 for the shirt but I will pay you $7.

Termination by Law Changes in law terminates offer. An offer is perfectly valid and good when made but then law passes that makes it illegal; cannot enter into an illegal contract.

Termination by Law Total destruction. If you sell a car and person tells you they will give you the money the next day. You decide to take out the car one last time and car crashes.

Termination by Law Dead people can't sign a contract, nor can insane and mentally unstable people by law.

Part of an agreement (element of contract) Under common law, at the point of acceptance you have a legally binding contract. REQUIRMENTS 1). Must be Unconditional: Must be exact Mirror Image Rule -Any change makes it a counteroffer. Accept how the contract is. Acceptance must be identical with the offer in order to make a binding contract. 2). Must be Unequivocal: Must be definite. Obviously accepting an offer. 3). Must be legally COMMUNICATED back to the offeror: Acceptable mode or medium of communication. Specified! If no specification then reasonable means, unless offer states how you must accept. If not reasonable, no acceptance until received by offeror; MAILBOX RULE -If the acceptance letter is improperly dispatched, such as being mailed with an incorrect address or set in violation of the terms of offer, the acceptance is not valid until it is received by the offer. EXCEPTION- If secretary puts wrong address on letter, offeror has until they receive acceptance to revoke which gives them much more time to revoke it.

Mutually bargained for exchange, a promise, to be enforceable, must be supported by consideration; something of value that is given up in return for the promise of the other party to the contract. Legal detriment to one side and Legal benefit to the other.

An act, or promise to act, or refraining from an act. Giving up something you are entitled to receive, not doing something that you have a right to do. Ex). You mowing lawn and getting paid. Your legal detriment is mowing lawn. Payers legal detriment is paying you.

Legal right acquired by promise due to promisee's legal detriment. Usually occur simultaneously. Ex). You mowing lawn and getting paid. Your legal benefit is getting paid. Payers legal benefit is getting his lawn mowed.

Generally, courts are not interested in adequacy of consideration. Not going to bail you out of a dumb deal. Courts will not examine whether the consideration given by one party actually benefits the other party.

No consideration, no real commitment to contract, no contract, BEWARE of them. Expression cloaked in promissory terms that does not actually involve a commitment by the promisor. Fifth Circuit case out of New Orleans, LA. Contract to supply raw materials at a specified price for a specified time contains a provision that the price os subject to change without notice at the discretion of the supplier, no commitment has been made. You think you are getting something but you really aren't, "we normally pay a bonus"---doesn't promise that bonus, just hints they might. CANNOT ENFORCE: no consideration. Doctrine of Consideration requires that the promises of both parties to a bilateral contract be supported by consideration; if one of those promises is illusory, nor does not have to be done, then the entire contract fails.

EXTREMELY difficult to prove, extreme situations. Makes you enter a contract without consideration. Reasonable person would rely on promise and change position and thereby suffer a substantial loss of promise was not enforce-----IF a person makes a promise under circumstances such that it is easy to foresee that a reasonable promisee would be inducted to rely on the promise and IF the promisee will suffer big loss of the promise is not kept, then promissory estoppel may be used to ENFORCE the promise because of NO CONSIDERATION. Ex). Swim makes you an offer to contractually buy something from him, you do not have money so you sell everything you own; meanwhile swim sold it to someone else but never told you to stop selling your stuff. You RELIED on his promise to you own DETRIMENT. IF YOU CAN PROVE IT HAPPENED, then you can make them enter to contract.

Ability of contracting party to understand that a contract is being made and to understand its general nature. Types of situations where capacity is important: -Minors -Intoxicated people -Insane people

Capacity (minors): Kids cannot enter into a contract until they are 18, IF they do it is VOIDABLE by the child because they do not have capacity. But IF they child wants to do the contract they can.

A child cannot void out of a contract for: -Necessities: If they are truly on their own. If their parents die. -Enlistment in military: Under common law, if you enlist in the military then you are in the military. -Marriage: Now there are some statutory requirements, if you lied to get married you are till married. -By Statue (insurance, banking, transportation, student loan): Need insurance to drive car which you can do at 16, still have to pay for hot checks

Minor voids contract, can be by words or action up until and shortly after 18th birthday. Minor only needs to manifest an intention not to be bound by the contract. May owe duty of restitution of able to, if you cannot pay restitution then other party wont get restitution. Can lead to restitution being owed by child if he/she can pay it. RESTITUTION: Corresponding duty to return the object of the contract to the other part.

Minor accepts contract after reaching age of majority. Can be by words or actions. Ex). If child buys a car and makes a payment once they are 18 it is ratified. If child DOES NOT disaffirm the contract, they ratify it.

(Fake ID) Common Law: Minor can still disaffirm Trend: Hold minor to contract in which they misrepresent their age. MINORITY RULE: If a child is smart enough to set you up, they kew they were entering into a contract. MAJORITY RULE: Doesn't matter if the child lied to you, they can still disaffirm it.

If intoxicated at the time, contract is voidable. When sober can ratify or :disaffirm. Standard of Intoxication: SO intoxicated that did not understand the very nature of the contract. Must be so gone that you don't understand what you are doing, drunker you are the better-VERY difficult to prove. Make disaffirmance due to intoxication RARE RARE RARE. If you can prove, you MUST PAY RESTITUTION!

Can be voided, voidable, or valid. Adjudicated Insane: Court has ruled person to be legally insane. NO restitution and contract is void. They do not have the capacity to enter contract. (No capacity=No contract) Unadjudicated Insane: Court not ruled person to be legally insane, contract is voidable by unadjudicated insane, restitution is owed.

Contracts must be legal to be enforceable. (If the contract is for illegal purposes it is voided.) Illegal contract is void if goes to very nature of the contract. Cannot violate the state or federal law and cannot violate public policy.

Violate public policy! One party, due to unequal bargaining power takes advantages of other person. Criminal side of this is price gouging.

Releases one party from consequences of wrongful acts or negligence. Can't contract out of gross negligence. Release says you won't hold a party responsible. This is like a release on steroids. They are super greedy and go past a release-to the point where the party is saying even with gross negligence they aren't responsible. Mainly serve to alert the signing parties of inherent dangers and possibly delude them into thinking they have no cause of action in the event of an injury.

Grey area and confusing Is gambling legal in Texas? Some forms, yes. Most forms, no. If illegal, you do not have to pay.

In the bible, ancient laws. Charging too much interest; an illegal amount of interest. Penalty to the party charging the usurious interest rate which can be up to threee times the interest charged and even in extreme situations, forgive the principle of the debt. Result of Double Usery: you don't have to pay the principal, plus interest owed, plus interest paid, gets back, plus courts fees.

Must freely and voluntarily enter into the contract. -Mistake -Fraud -Real Duress -Undue Influence

If only unilateral mistake (one party), then NO relief-binding contract. Must be mutual mistake to have relief. Mutual Mistake of Value: No relief, mistaking the value of property when entering into a contract If mutual mistake (all parties were mistaken) of a Material Fact, Material Fact: Something all parties knows has to be there. Either party can VOID contract. Does have relief to either party.

Lying with the intent to deceive you, you are mislead, and a reasonable person would have been mislead. Ex). Con Man Fraud does not usually apply to 1). Predictions and 2). Statement of Opinion: Reliance on an opinion does not count as fraud. ELEMENTS: 1). Misrepresentation has occurred 2). Intent and attempt to deceive. 3). Innocent party, justifiable reliance on misrepresentation 4). Innocent party has been injured Innocent party has two basic options: 1). Contract can be rescinded and the innocent party restored to his or her original position. 2). Innocent party can seek to enforce the contract and sure for damages cause by fraud.

Someone forces another person to enter into a contract against his or her will. If action is wrongful or illegal, innocent party can rescind contract. Real Duress: Relief, criminally bodily harm or deadly conduct against you or loved one. Violable by the innocent party. Ex). If she points a gun to your head and forces you to give you the ring, then you can get the ring back. Personal Duress: Economic, no covered. No relief. Ex). If you sell your class ring to pay for an adoration.

Someone takes control of another person and substitutes their will for that of the victim, they get inside your mind and takes over. Ex). Lawyer to clients

Based on 2 things: 1). Statue of Frauds 2). Uniform Commercial Code (UCC)

Parliament in 1677 passed Statue of Frauds, which required certain important contracts to be in writing for it to be enforceable. Certain contract must be in writing but can be oral. Purpose: To prevent fraud by claiming that a contract existed when in fact it did not. 1). Contracts that can't be performed in one year. -Time you enter into contract, is it possible to do it in one year. If it is, doesn't have to be in writing. 2). Contracts for the transfer of an interest in Real Property. -Contracts must be in writing for any transfer of property 3). Promise to perform contractual obligations of someone else. -If you are obligated to pay the debt of someone else, it must be in writing. 4). Promise in contemplation of marriage. -1600, women were basically property. Had to find a suitable son-in-law to take over estate. Divorce: Rich people have a prenuptial agreement in writing

Contracts for the sale of goods, tangible items of personal property of over $500 must be in writing under the UCC. Ex). Receipt

Cannot use oral evidence to contradict written terms of a contract. 1). Subsequent written or oral modification of written contract -LEGAL. Ex). Talk to landlord about lease and it says no pets. You have a dog, landlord said you can have a dog even though you signed a contract saying you would not. They can still take it aways. However, if doctor says you need a puppy, landlord say it is okay since this is SUBSEQUENT, you can not bring in oral evidence. 2). Oral evidence to prove contract was void or voidable. -If the contract was induced by fraud, oral evidence attesting to the fraud can be introduced. Ex). If I did not sign it the guy said he was going to shoot me. 3). Ambiguous or incomplete contracts -Oral evidence can be presented to explain terms. Like a written contract when it is incomplete, oral can be used to fill in the gaps. 4). Prove of Condition - Written contract may be subject to a written condition. Evidence of the condition doe not alter or modify the terms, it involved the enforceability of the written contract.

Breach of contracts cases are usually filed because one or both parties failed to perform their promises; in legalese the contract was not properly discharged. 1). Discharge by Performance 2). Discharge by Conditional Contracts 3). Discharge by Agreement 4). Discharge by Impossibility

Good: Total performance by all parties -You do everything you are supposed to do and so does the other party. Yay everyone is happy. Anything less that is full performance is breach of contract. Bad: Substantial (almost) performance -Slightly below what is reasonably expected. Substantial does not discharge the breaching party from the contract. Non-breaching is still entitled to sue for damages. Ugly: Material breach of the contract. -Well below what is reasonably expected. Further you get from complete performance the closer you get to material breach.

Duty dependent upon the occurrence or nonoccurence of some ever. Conditional Precedent: Clause in a contract that identifies some condition or obligation triggering event that must occur prior to the creation of an obligation under the contract. Ex). Travel agent wouldn't be required to accept and pay for the rooms unless 80 inches of snow pack. Conditional Subsequent: A condition that follows, or is subsequent to, the duty to perform. Operates to terminate a party's absolute promise to perform. Ex). A and B enter into a contract with provision that the contract will become null and void if either company becomes the subject of a hostile take over. Ex). Life insurance policy requires the death of someone. If this never occurs, you do not have to perform. Concurrent Conditions: Each party's absolute duty to perform is conditioned on the other party's absolute duty to perform. Only occur when the parties expressly or impliedly are to perform their duties simultaneously. Ex). Selling a house Ex). "You don't do it, I don't it"

Rescission Novation Accord and Satisfaction

All parties of the contract have to agree not to do the contract- Second Contract undoing first contract. It has to have restitution-consideration You can give up restitution as your consideration

New Contract under the identical exact terms of the old contract but you substitute one of the parties. Ex). Release from a lease. When you ask the landlord to scratch your name off and put a new one on. Takes one parties name out and put another parties name on it.

Parties agree to accept performance that is different for this different performance originally promised. Accord: The performance of the substituted obligation. Sanction: The performance of sub. obligation *Accord is not binding until sanction* Only works in an UNLIQUIDATED debt -Neither party can prove what they are owed -Ex). You hire Swim for legal case, legal fee is $500, you do not have that much, so pay Swim in increments of cash, neither of you keep records, you hand Swim $1500 and say "that does it!" and he says "No, you owe me $1000". You say "Ill pay you $500 (ACCORD)" and Swim says :Okay (SATISFACTION)". It only works if it is truly in dispute and no one can prove with certainty how much is owed from both parties. Liquidated Debt: Some parties with legal certainty can prove what they are owed and no exactly to the penny what you pay. Liquidated Damages: Specified damages, known and determined.

Subjective Impossibility: "I can't do it!", Just because you can't do it, does not erase your obligation to do it. NO DISCHARGE. Ex). If workers go on strike and you can't finish it on time, you still have an obligation to do it. Objective Impossibility: (other card)

Law says it cannot be done. 1). When the party to a personal contract dies prior to performance, it discharges the contract. -PERSONAL CONTRACT: Hire someone based on who they are. Ex). Peyton Manning has already played the season and completed his performance, even if he dies the Broncos would still owe his estate the money. 2). Specific subject matter of the contract is destroyed -Terminates an offer and terminates a contract, BUT not always. UNIQUE GOODS: If it is a unique good that is destroyed, the contract is discharged. Ex). Antique vase breaking-discharged. -If contracting parties do not contemplate possibility of fire, then it cannot be said that risk of fire has been allocated by contract; discharge for this type of impossibility is not appropriate where parties include a clause specifying the obligations of the parties in the event of a fire. 3). Change in the law renders performance illegal. -Intervening illegality. SUBSEQUENT ILLEGALITY: Declaring the subject of the contract to be illegal. 4). Performance becomes commercially impractical. - MASSIVELY more difficult or more expensive than was originally anticipated. This is where the law says it can't be done because it became impossible. Ex). Suppose to paint Swim's house but it burned down, don't have to paint where house used to be. -Party with the informational advantage about the risk should be held liable. -Doctrines only applies when: 1). Burden of complying is extreme and 2). When the additional burden was not recognizable when the contract was formed.

One party in advance of time of performance notifies innocent party that they will not perform under contract. This is MATERIAL BREACH. Ex). Do the yard work Saturday, comes out to see the yard on Thursday and realize it is too much work so you say you won't do it. (BREACH). Swim can treat it as a breach and find someone else to do it, OR he decides to wait for you to come around to your senses. FIRST OPTION: Swim will hire someone else. Even if you show up to do the yard work and he has already hired someone, you can't do it because you already repudiated the contract. Innocent party can: 1). Treat contract as breached and find a replacement. 2). Wait and see. 3). Innocent party is discharged if chooses to be.

Contracts don't give punitive damages. 1). Monetary Damages (Money, most common) -Compensatory Damages -Consequential Damages -Liquidated Damages 2). Equitable Remedies (court orders): only available when monetary damages do you no good. Make you do something legally required to do. -Rescission and restitution -Reformation -Specific Performance -Injunction 3). Mitigation Damages

Innocent party has a duty to lessen the damages. Ex). If you repudiate and Swim hires someone else, he must look for the cheapest one who would have done it as well as you would have. Innocent party must mitigate or lessen the damages in breach of contract. Limits amount of damages. Prevent damages from increasing in a reasonable manner.

Types of Monetary Damage and most common Compensates you for your actual loss and that's it. If you've already performed the contract, you get what the contract is worth. If you have not completed it and they make you stop, you get compensated for the work done thus far.

Types of Monetary Damage Damages that flow as a direct result of DIRECT BREACH. The further away you get from the actual breach, the less likely you are to recover these. In general, the risk of loss of consequential damages is only known by one party to the contract, the other party is not liable for the consequential damages. Ex). Utilities company cuts off electricity because you didn't pay, you keep receipts and show company you pay. Company says they will take care of it. You leave Friday right after you put shrimp in fridge. Company still shuts off power, house stinks and ruins shrimp. Company owes consequential damages. BUT smells so bad you go then to the Hilton and ask for the penthouse suit, you wont get that room paid for.

Types of Monetary Damage Specified damages in the contract. If provision calls for an unreasonable large sum that is unrelated to the actual damages, the provision is called a penalty and the courts will not enforce it. Distinction between enforceable and unenforceable: -Stipulated damages that amount to a penalty may merely reflect the promisee's very strong desire to have project finished on time. -Distinction justified on grounds of economic efficiency -Penalty clauses create perverse incentives for the beneficiary of the clauses to induce the breach of the contract in order to collect the penalty. -Increases risk associated with events over which the parties have little control, such as weather.

Types of Equitable Remedy An action to undo or cancel a contract and return the parties to the position they occupied prior forming the contract. (Often used where this is fraud, mistake, duress, or failure of consideration) If innocent party had expenses or money due, the restitution is owed. Ex). Baker is to buy land in Florida to build a house, finds out land is flooded for half the year he can rescind.

Types of Equitable Remedy Remedy used to rewrite the contract to express the true agreement between the parties. May be needed when there is a clerical error that gives one party an unbargined-for advantage. Judge reforms the contract to what is should have been in the first place. Ex). Did not fill in the blanks, typos, etc. If an illegal part is in there, judge can take it out. Some courts will find the contract to be valid and just rewrite the invalid portion.

Types of Equitable Remedy Courts orders you to do what you agreed to do under the contract. Dealing with something unique. Ex). Contract to sell product to Swim, you realize you could sell it way more somewhere else, Swim can have a judge force you to sell the product to him. (Land sales) Doesn't apply to personal contracts. ONLY applies when money does no good. Courts are reluctant to order specific performance as a remedy because the courts would generally have to supervise the transaction.

Types of Equitable Remedy Courts stops you from doing something you wanted to do.

Is an an extension of contract law because an agency relationship is crated when the agent agrees to act on behalf of and be under the control of the principal. Principal gets the agent to deal with third parties. Agent is rep of the principal. They can bind the principal to contracts with third parties. Therefore, relationship is very common is business. Agency by Agreement Agency by Ratification Agency by Apparent Authority/Estoppel Agency by Operation of Law

Written agreement called Power of Attorney (Unless under Statue of Frauds, agreement does not have to be in writing. Agent and principal agree to do it. -POWER OF ATTORNEY: You can do everything I can do personally. -UNIVERSAL Power of Attorney: You can do everything I can do personally. Agency has obligation to operate as principal instructs. -If the principal asks you to do things you do not want to do, you can quit. -If principal asks you to do something illegal and you do it, the cops will arrest you. Expressed Power: Whatever power is expressly given to the agent in the agreement. Implied Power: Whatever power is expressly given to the agent in the agreement.

Non-agent enters into the agreement. You act like you are the agent but you really aren't. Alleged Principal can: 1). Say no, then no agency and only the agent is bound to the agreement, 2). Ratify, after the fact, non-agent action; if does-principal becomes bound to the agreement. Someone without the agreement of the "principal" which is not a real principal, acts on behalf of the "principal" and then after the fact, notifies the "principal of this actions". Entering into an agreement for someone else without their authority; they can say no and then you are the party that agreed to the agreement and must fulfill your end.

Principal and third party, no actually authority by the agent. Agent tells third party they have the power to do something that you did not grant them authority to. Even though the principals knows the agent is acting as his behalf and that is well know to other people, the principal does nothing to stop the agent from acting like his representative; the principal has given the third parties the impression that the person is his agent, then principal has allowed the impression that an agency relationship has been est. -Principal is prevented, estopped, from denying the relationship. Ex).

Law creates an agency relationship; normally in emergency situations. ex). babysitting and kid gets injured and hospital tells you they need a family member to sign, you become agent to sign.

1). Duty of Loyalty -Put the principals interest first in everything 2). Duty of Obedience and Performance -Must do what the principal says unless you can't, don't want to for moral reason or illegal 3). Duty of Reasonable Care -Ex). If you were the one picking a car up and taking it across the country. 4). Duty of Account -Don't intermingle funds, don't pad your expense account. 5). Duty of Notify -If there is anything that goes wrong, you must contact the principal and tell them about it. {Only time the agent doesn't put the principal first it is when it is for their own good}

1). Duty to cooperate with the agents -Principal must cooperate with the agent so the agent can do his duties. 2). Duty to compensate agent -If you agree to pay them, you have to pay them. 3). Duty to reimburse the agent's reasonable expenses -Even if you didn't agree to pay them, you have to pay them a reasonable amount. 4). Duty to provide a safe work environment 5). Duty to indemnify the agent for losses -If agent gets sued for doing what the principal told you to do, the principal has to pick up legal bill and pay it off.

Agents's liability can depend on disclosure, partial disclosure, or undisclosed. Total Disclosed Agency: Actual authority and apparent authority. By this, the principal can be liable if the agent is acting in what they were told to do. Agent is not liable because they told you who the principal was. Partially Disclosed Agency: When the agent tells the third party that he is just agent and that there is a principal but does not disclose the identity of that principal. ex). Hi I am Bri as an agent for X but I can't tell you who. Actual Authority. No apparent authority because they do not know who the principal. Undisclosed Agency: Agent does not even have to tell the person selling the good that they are an agent. Appears as if the agent is buying land for themselves. Seller has no clue there is a principal. Agent is bound to the contract.

Did the agent act within a scope of his agency duties? Respondent Superior: If the agent is doing what the principal instructed him to do, then the principal is liable-this is a legal statue of Respondent Superior. Based on employment law, employer is responsible if the employee is acting within their official scope of duties Vicarious Liability: Principal can be liable for the unauthorized torts of the agent Crimes: Scope of employment, employment here and does not mean hired. To determined whether or not the agent was acting within his or her scope, the court looks to see if the act was similar to authorized acts of the agent, was the agent authorized to be where he was at the time the unauthorized act occurred, and was the agent serving the needs of the principal when the agent did the unauthorized act. Principal not liable for the crimes of agent unless principal knew or should have known the activity.