Accounting 324- Chapter 34 – Flashcards
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A special type of express agent authority
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Power of Attorney
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grants the agent express authority over specifically outlined acts
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Special Power of Attorney
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Allows the agent to conduct all business for the principal
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General Power of Attorney
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specifies that the agents authority is intended to continue beyond the principles incapacitation
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Durable power of attorney
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when the third party is aware that the agent is making an agreement on behalf of a principal and also knows who the principal is
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Disclosed Principal
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if the third party is aware of the principals existence but not his or her identity **the agent and the principal are both considered parties to the contract and each may be liable separately from the other**
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Partially disclosed principal or unidentified principal
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if the third party does not know that an agent is acting on behalf of a principal
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Undisclosed Principal
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An agent who acts within the scope of her authority on behalf of a ____ or ____ principal is not liable for the acts of the principal... Only liable if the agent has authority to act on the principals behalf
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Liability of a disclosed or partially disclosed principal
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if the principal is _____ the agent herself can be liable for contractual nonperformance because courts generally treat the agent as a party to the contract If the agent acts within her authority on behalf of an undisclosed principal, the law will likely hold her liable for the agreement
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Liability of a partially disclosed principal, the agent
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"let the superior speak." phrase that applies in the context of the principal/employer-agent/employee relationship.
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Respondeat Superior
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liability that the principal/employer hold... liability assigned without fault, for any harm the agent/employee causes while working for the principal. *The principal/employer is liable not because he was personally at fault but because he negligently hired an agent**
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Vicarious liability
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the right to recover damages
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Right of indemnification
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depends on whether the principal authorized the agents act.
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Misrepresentation liability
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1. Cancel the contract with the principal and be compensated for any money lost. 2. Affirm the contract and sue the principal to recover damages
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Two options for third party if agent misrepresents herself
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as a general rule, if a principal authorizes an agent to misrepresent himself or herself, the principal is always liable.
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Legal principle of misrepresentation
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as a general rule, a principal is vicariously liable for the actions of his or her agent
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Legal principle of tortious conduct
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if an agent commits a crime in the scope of his or her employment without authorization from the principal, the principal is not liable for the crime.
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Crime and Agency Relationships legal principle
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must be given to third parties who have had business interactions with the agent. it directly informs them, orally or in writing, that the agency agreement has been terminated.
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Actual notice
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parties not directly related to an agency agreement may receive ____, which is how the termination of an agency is usually announced. *usually consists of publication in a generally circulating newspaper for the area where the agency agreement existed*
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Constructive notice
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if an agency agreement specifies that the relationship will exist for a certain amount of time, it will end when that time expires *must make new agreement at end of time period if both parties wish to continue the agreement*
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Lapse of time
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"john enters into an agreement with claire, a real estate agent, to sell his house. once claire sells the house, she no longer has authority to act on johns behalf."
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Fulfillment of purpose
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depending on its purpose, an agency relationship can be terminated on the ______
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occurrence of a specific event
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agency is a consensual agreement between two parties, can end agreement on this termination
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mutual agreement by both parties
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a principal can revoke an agents authority at any time. *this might constitute a breach of contract with the agent, leaving the principal liable for damages*
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revocation of authority
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an agent can terminate the agency relationship by renouncing the authority given to him/her. *agent can be liable for breach of contract if the agency agreement stated a specific amount of time that the relationship is to exist*
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Renunciation by the agent
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special kind of agency relationship created for the agents benefit, not the principals. The principal may not terminate this relationship. *this is terminated when an event occurs that discharges the principals obligation*
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Agency coupled with interest
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Death insanity bankruptcy changed circumstances change in law impossibility disloyalty of agent war
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Termination by operation of law examples
