May 5 law class

  1. What is agency?
    ¡“Agency is the relationship that exists between two persons when one, called the agent, is considered in law to represent the other, called the principal, in such a way as to be able to affect the principal’s legal position in respect of strangers to the relationship by the making of contracts or the disposition of property”
  2. What are some examples of agency?
    Power of attorney

    Acting on behalf of someone; i.e. want to sell your house but going on vacation.... sign a document giving someone power to sell it on your behalf...

    What position of law will you have changed for them?  Changing their legal position of what they own.

    Other examples: Sports Agents have the right to negotiate contracts, endorsements, etc.  Another example, Starbucks - who are you buying the coffee from?  You are buying it from an agent of the company - the ability to receive cash and provide goods to a customer, and are giving the right to selel that to a customer.  This is because the barista is entering a contract (I agree to pay you, I agree to sell you...)
  3. What are the key questions you have to ask when entering agency?
    What is the scope, the power (authority) granted by the principle?

    Always start with authority.    What amount of power did the principle give the agent?

    Did the agent act within the authority?  If the answer is yes, the principle will be bound to that action.
  4. What is Actual Authority?
    ¡¡If actual authority exists, A can bind P to a K with a 3P without A being bound themselves.Differs from some other contractual relationships…

    ¡¡EXPRESS authority¡¡IMPLIED authority Considers what is USUAL authority or

    CUSTOMARY authority“Agency by implication”…with limits¡

    DEFINITION of 'Actual Authority' Specific powers, expressly conferred by a principal (often an insurance company) to an agent to act on the principal's behalf. This power may be broad, general power or it may be limited, special power. Also known as "express authority."
  5. What is consideration?
    Something of value (e.g. a starbucks coffee, money, etc)

    Consideration in English law is one of the four main building blocks of a contract. Consideration can be anything of value (such as an item or service), which each party to a legally binding contract must agree to exchange if the contract is to be valid. If only one party offers consideration, the agreement is not legally a binding contract. In its traditional form, expressed as the requirement that in order for parties to be able to enforce a promise, they must have given something for it (quid pro quo): something must be given or promised in exchange or return for the promise. A contract must be "met with" or "supported by" consideration to be enforceable; also, only a person who has provided consideration can enforce a contract. In other words, if an arrangement consists of a promise which is not supported by consideration, then the arrangement is not a legally enforceable contract. Mutual promises constitute consideration for each other. ("I promise you that I will do X, in consideration for which you promise me that you will do Y").
  6. Express authority
    Express authority is the authority which the principal has expressly given to the agent whether orally or in writing.
  7. Implied authority
    Implied authority(sometimes described as usual authority) is the authority of an agent to do acts which are reasonably incidental to and necessary for the effective performance of his duties.

    ¡IMPLIED authority Considers what is USUAL authority or CUSTOMARY authority“Agency by implication”…with limits

    Usual authority - the type of authority that you have had with me in the past.  "You did it last time".  Ability to rely on past experience (e.g. 1,000$ purchases).  Looks to the history of the parties.

    Customary authority -  Has nothing to do with the history of the parties; has to do with the type of agent you are.  E.g. at starbucks you spill your cup, barista gives you a free coffee.
  8. Does express authority need to be written?
    No
  9. What are fiduciary duties of agents?
    • Duty to perform the task
    • Duty to act in best interest of P
    • Duty to act with reasonable care
    • Duty to avoid conflict of interest
    • Duty to keep proper accounts…
    • Duty to not delegate further
    • Duty to not take secret profits
  10. Delegatus non potest delagare
    This is a fiduciary duty of an agent to a principle.

    "no delegated powers can be further delegated".
     

    "one to whom power is delegated cannot himself further delegate that power".[1]
  11. Usual authority
    Usual authority - the type of authority that you have had with me in the past.  "You did it last time".  Ability to rely on past experience (e.g. 1,000$ purchases).  Looks to the history of the parties.
  12. Customary authority
    Customary authority -  Has nothing to do with the history of the parties; has to do with the type of agent you are.  E.g. at starbucks you spill your cup, barista gives you a free coffee.
  13. Do agents owe fiduciary duties to their agents?
    All agents owe fiduciary duties to their principles.

    A fiduciary is a person who holds a legal or ethical relationship of trust with one or more other parties (person or group of persons). Typically, afiduciary prudently takes care of money or other asset for another person.
  14. Pump and dump
    Drive people to buy a specific stock so it gets overvalued; then you sell at a high (you dump it)

    This is pocketing profits without the principle knowing

    Pump and dump is a scheme that attempts to boost the price of a stock through recommendations based on false, misleading or greatly exaggerated statements. The perpetrators of this scheme, who already have an established position in the company's stock, sell their positions after the hype has led to a higher share price. This practice is illegal based on securities law and can lead to heavy fines.Read more: Pump And Dump Definition | Investopedia http://www.investopedia.com/terms/p/pumpanddump.asp#ixzz47qC59M1A Follow us: Investopedia on Facebook
  15. What is the duty of principles?
    Remuneration- Default position?  they will not get paid

    Reimbursement- If in connection with what?

    ¡¡Indemnity- If loss occasioned when? Principle must put them back in the position they would have been in.
  16. THe agency relationship ends when...
    The task is completed (by act of parties).  E.g.  we agreed on a certain timeframe, we are past the timeframe therefore we will terminate.

    Death, bankruptcy, frustration (by operation of law).
  17. A can ........if to do so is within the scope of A’s actual authority.
    A can bind Principle to a contract with a 3rd party if to do so is within the scope of A’s actual authority.

    When you have no authority but you're binding the principle.

    1964, freeman and lockyer


    Mr Freeman and Mr Lockyer sued Buckhurst Park Ltd and its director, Shiv Kumar Kapoor, for unpaid fees for their architecture work on developing the ‘Buckhurst Park Estate’ in Sunninghill,Berkshire. The company’s articles said that all four directors of the company (another Mr Hoon, who was never there, and two nominees) were needed to constitute a quorum. Originally the company planned to simply buy and resell the land, but that fell through. Kapoor had acted alone (as if he were a managing director) in engaging the architects, without proper authority. The company argued it was not bound by the agreement.Judge Herbert at Westminster County Court held the company was bound, and the company appealed.
  18. Ostensible / apparent authority, or 3 part test
    • Apparent authority refers to a situation where a reasonable third party would understand that an agent had authority to act. This means a principal is bound by the agent's actions, even if the agent had no actual authority, whether express or implied.
    • ---

    ¡Claim by 3P against a P  (reasonably rely upon the agent)

    • ¡¡Required elements:
    • - P made, or permitted a representation as to A’s authority.
    • -3p reasonably relied upon that representation to their detriment.  (they suffered harm)
  19. PLFTCBA
    Principle is liable for the tortes committed by it's agent

    (in limited circumstances)

    Bottom line the principle will be responsible for the bad acts (tortes) by the agent as long as the bad acts happen in connection to the authority given to that agent.
  20. Lloyd v. Grace, Smith & Co
    The plaintiff went to the defendants, a firm of solicitors, for the purpose of selling her property and saw their managing clerk, who induced her to convey the property to himself for the purpose of the sale. The clerk then sold the property in his own name, and absconded with the money. Held, the defendants were liable.


    • Facts
    • A solicitors’ clerk fraudulently induced a conveyance from a client, then disposing of her house for his own personal benefitIssue

    Were the solicitors responsible for the fraudulent act?Decision: Yes


    Reasoning:  Although the act was fraudulent, the clerk was authorised for procure signatures for the firm; apparent authority represented by virtue of his position as clerk overruled the nullity usually created by fraudulent acts
Author
maylott
ID
319807
Card Set
May 5 law class
Description
May 5 law class
Updated