Chapter 33 ACCT 324 - 002
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This 2 page Class Notes was uploaded by Kendall Davis on Friday September 30, 2016. The Class Notes belongs to ACCT 324 - 002 at University of South Carolina taught by Julius David Johnson (P) in Fall 2016. Since its upload, it has received 4 views. For similar materials see Survey of Commercial Law in Accounting at University of South Carolina.
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Date Created: 09/30/16
Chapter 33 Agency: relationship between principal and agent Agent: one authorized to act for/on behalf of principal Principal: person who hires agent Fiduciary: one with duty to act primarily for another person’s benefit Creation of Agency Relationship Consensual relationship Express agency: agency formed by making written/oral agreement Power of Attorney: Document giving agent authority to sign legal documents on behalf of principal Durable Power of Attorney: gives the power to the attorney to continue even if the principal becomes incapacitated Power of Attorney: Document giving authority of attorney to sign legal documents on behalf of the principal Agency By Implied Authority: cannot conflict with express agency; formed by implication, through conduct of parties Agency By Estoppel: Agency formed when principal leads third [arty to believe another individual serves as their agent when there is no agency relationship; this is always the fault of the third party ex; IBM’s president leads Microsoft to believe that Joe is their salesman, but he’s not Agency By Ratification: Agency that exists when individual misrepresents himself/herself as agent for another party, and principal accepts/ratifies unauthorized act individual must misrepresent himself/herself as agent for another party Principal accepts/ratifies unauthorized act Principal has complete knowledge of all material facts regarding contract Principal must ratify entirety of agent’s act Ex. Person’s friend goes to car seller and says that his friend will buy it, friend (principal) must ratify this contract and have all of the facts of the contract Types of Agency Relationships Agency Relationship: fiduciary relationship (relationship of trust) in which agent acts on behalf of principal PrincipalAgent Relationship: ex: sports agent, salesperson at store EmployerEmployee Relationship: ex: hired to perform tasks, work in stockroom, janitor EmployerIndependent Contractor Relationship: Independent Contractor or Employee? Does worker engage in distinct occupation? Does employer provide tools? What skill is required? What is the length of time the worker is employed? Is worker a regular part of the business? How is the worker paid? Employees get certain benefits, independent contractors do not Employers are responsible for employees actions, but not independent contractors Principal’s Duties To Agent Compensation biggest duty to agent Reimbursement and Indemnification Cooperation Safe Working Conditions Agent’s Duties to Principal Loyaltyconfidentiality Notification Performance Obedience even if an agent finds something that the principal wants, and the agent wants it, the agent must first present it to the principal Notification Accounting Principal’s Rights and Remedies Against Agent Constructive Trust: if, in example above, agent buys piece of land, court can rule that the land is now the Principal’s Avoidance Indemnification As well as, suing for breach of contract Agent’s Rights and Remedies Against Agent Tort and Contract Remedies Demand For an Accounting Specific Performance: in unique cases
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