1. Chapter 21 21-1 Creation and Operation of Agencies 21-2 Agency Duties
9/13/2018
Chapter 21 Agency Law
21-1 Creation and Operation of Agencies
21-2 Agency Duties
Chapter 21
LAW

2. 21-1 Creation and Operation of Agencies
GOALS
Understand the agency concept
Appreciate the scope of agency authority
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3. WHAT IS AN AGENCY?
Principals
Agents
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4. AGENCY RELATIONSHIPS
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5. Define the agency relationship.
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6. SCOPE OF AN AGENT’S AUTHORITY
Creation of authority
Express grant of authority
Implied grant of authority
Apparent authority
Ratification
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7. List the ways in which agency authority can be created.
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8. 21-2 Agency Duties GOALS List the duties of an agent
List the duties of a principal
Identify when an agency is terminated
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9. WHAT ARE AN AGENT’S DUTIES?
Duties owed the principal
Loyalty and obedience
Reasonable care and skill
Confidentiality
Accounting
Duties owed to third parties
Exceeding the scope of authority
Principal’s lack of capacity
Liability due to an undisclosed principal
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10. What are the duties of an agent to the principal?
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11. WHAT ARE THE PRINCIPAL’S DUTIES?
Duties owed the agent
Duties owed third parties
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12. What is a principal’s main duty?
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13. HOW IS AN AGENCY TERMINATED?
By unilateral action of a party
By agreement
By operation of law
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14. Name the three general ways in which an agency may be terminated.
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15. PREVENT LEGAL DIFFICULTIES
If you are a third person dealing with an agent you should verify the extent of the agent’s authority directly from the principal. If you are uncertain about the authority or honesty of the agent, make payment by a check payable to the principal.
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16. PREVENT LEGAL DIFFICULTIES
If you are an agent, when you sign anything for your principal, make it unmistakably clear that you are signing as an agent. Always write the name of the principal first, and then add “by” and your signature followed by the word “agent.” If you exceed the scope of your authority and that injures the third party, you may be liable for that injury.
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17. PREVENT LEGAL DIFFICULTIES
If you are a principal, remember that your agent’s acts become your acts. Use care in selecting agents. If you discharge your agent, protect yourself against apparent authority by notifying those the agent dealt with in your name and publicizing the discharge in newspapers of general circulation in the area.
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18. PREVENT LEGAL DIFFICULTIES
As an agent, you must be loyal to your principal, maintain confidentiality, exercise reasonable care and skill in obeying all proper instructions, and provide accountings as required.
If you handle your principal’s money or other assets, you should keep them separate from your own.
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