Blaw Unit 3 Review

Unit 3

Chapter 28 – agency law

* Creating an agency relationship

* Consent – to establish consent, the principal must ask the agent to do something and the agent must agree

* Control

* Principals are liable for the acts of their agents BC they exercise control over the agents

* An agent and principal must not only consent to an agency relationship, but the principal must also have control over the agent

* Fiduciary relationship

* A special relationship with high standards

* Beneficiary places special confidence in the fiduciary who, in turn, is obligated to act in good faith and candor, putting his own needs second

* Agents have a fiduciary duty to their principals

* Elements not required for an agency relationship

* An written agreement

* Equal dignities rule – if an agent is empowered to enter into a contract that must be in writing, then the appointment of the agent must also be written

* A formal agreement

* Compensation

* Duties of agents to principals

* Duty of loyalty – the agent must solely act for the benefit of the principal in all matters connected with the agency

* Outside benefits – an agent may not receive profits unless the principal knows and approves

* Confidential information

* Agents can neither disclose nor use for their own benefit an confidential information they acquire during their agency

* This duty continues even after the agency relationship ends

* Competition with the principal

* Agents are not allowed to compete with their principal in any matter within the scope of agency business

* Conflict of interest between two principals

* Unless otherwise agreed, an agent may not act for two principals whose interest conflict

* Secretly dealing with the principal

* If a principal hires an agent to...