Study Guides (248,683)
Canada (121,693)
LAW 603 (58)
Final

All lecture notes in one file

26 Pages
362 Views

Department
Law and Business
Course Code
LAW 603
Professor
Theresa Miedema

This preview shows pages 1,2,3,4. Sign up to view the full 26 pages of the document.
Description
CLASS 1 (J ANUARY 12 TH2011) D R. THERSA M IEDEMA H OME O FFICE: (416)423-9140 ( CALL OFFICE DURING M ONDAYS TO FRIDAYS , 10AM 7 PM ) T.MIEDEMA @ RYERSON .CA M OBILE: (647)286-4374 ====================================================================== =============== C HAPTER 20: RULE ABOUT AGENCY RISK MANAGEMENT ISSUE ; AS PRINCIPAL WHAT IF AGENT GETS THEM INTO CONTRACT THAT THEY DON T LIKE ABOUT EFFICIENCY IN BUSINESS; CANT MEET ALL THIRD PARTY,ETC MOST EFFICIENT WAY TO ENSURE THAT PEOPLE CAN USE AGENTS AS INTERMEDIATES WITHOUT ALLOCATING TOO MUCH DUE DILIGENCE WHO IS BEST PLACED TO MANAGE THIS RISK ? P RINCIPAL (APPOINTS) -> A GENT -> (NEGOTIATES ON BEHALF OF PRINCIPAL )THIRD PARTY THIRD PARTY CANNOT SUE AGENT IF SOMETHING GOES WRONG E.G.RYERSON UNIVERSITY IS A LEGAL PERSON (PRINCIPA). CORPORATIONS ENTER THROUGH CONTRACTS THROUGH AGENTS THIRD PARTY DOESN T CARE IF AGENT RETURNS ,BUT THEY WANT THE PRINCIPAL TO COME BACK AND IF AGENT HAS THE AUTHORITY TO REPRESENT PRINCIPAL ROGUE AGENTS WHEN SOMETHING WRONG HAPPENS AGENT ACTING ON BEHALF OF THE PRINCIPAL S INTEREST COMMON LAW AND STATUTORY LAW BIND THIS CONTRACT FORMATION (HUMAN ACT , EMPLOYMENT ACT , ETC) E G .IF AGENT IS A LAWYER OR REAL ESTATE AGENT, THERE IS ANOTHER LEGISLATION ,THERE ARE OTHER GUIDELINES THEY MUST FOLLOW ) HOW TO SET UP AGENCY AGREEMENT : 1) EXPRESS AGREEMENT (SCOPE OF AUTHORITY ACTUAL AUTHORITY :THERE ARE SET BOUNDARIES WHAT THE AGENT HAS TO NEGOTIATE ) www.notesolution.com - PRINCIPAL/AGENT ENTER CONTRACT THAT SETS OUT TERMS ON WHICH THE AGENT IS APPOINTED , AND INCLUDES THE SCOPE OF THE AGENTS AUTHORITY AND AGENT S PAYMENT . - E XAMPLE OF EXPRESS AGREEMENT IS LISTING AGREEMENT THAT IS SIGNED WITH A REAL ESTATE AGENT . - IF STATUTE OF FRAUDS APPLIES TO THE PROVINCE ,CONTRACT MUST BE IN WRITING IF THE RELATIONSHIP WILL LAST MORE THAN ONE YEAR . - COMMERCIAL REPRESENTATION AGREEMENT WHEN A MANUFACTURER OF GOODS AGREES TO LET SOMEONE TO ENTER INTO CONTRACTS WITH CUSTOMERS ON ITS BEHALF TO SELL ITS GOODS (P RINCIPAL APPOINTS AN AGENT TO NEGOTIATE CONTRACT ON BEHALF OF PRINCIPAL TO THIRD PARTY . THE CONTRACT IS THEN ESTABLISHED BETWEEN THE PRINCIPAL AND THE THIRD PARTY . 2) REPRESENTATIONS - IMPLICATION (WORDS ,OR ESTABLISHED FROM CONDUCT FROM PRINCIPAL ) - APPARENT AUTHORITY 3) LAW - PARTNERSHIP FORMING A LEGAL RELATIONSHIP TOGETHER ,THEY CANNOT INCORPORATE ,LIABILITY IS PUT ON ANY ALL MEMBER OF THE PARTNERSHIP ) 4) RATIFICATION - SITUATION WHERE AGENT DOES NOT INITIALLY HAVE AUTHORITY TO NEGOTIATE ON PRINCIPAL S BEHALF .. AFTER THE FACT PRINCIPAL MIGHT AGREE TO THE NEGOTIATION 2 TYPES OF AUTHORITY 1) ACTUAL AUTHORITY EXPRESS AGREEMENT 2) APPARENT AUTHORITY PRINCIPAL GIVES THIRD PARTY REASONABLE IMPRESSION THAT THE AGENT HAS THE AUTHORITY TO ACT - PRINCIPAL :ONLY RELY ON WHAT THE PRINCIPAL SAYS AND IMPRESSION THEY GIVE AND NOT ONLY RELY ON AGENT ALONE - THIRD P ARTY : REASONABLE IMPRESSION , WHAT S REASONABLE ? *IMPRESSION COULD BE WORDS , CONVERSATION BETWEEN PRINCIPAL AND THIRD PARTY (X WILL NEGOTIATE ON MY BEHALF ) * CONDUCT * EXPRESS /IMPLIED DIRECT /INDIRECT -IF EXPRESS AGREEMENT DOESN T COVER WHAT PRINCIPAL TOLD THIRD PARTY , IT DOESN T MATTER . www.notesolution.com WHATEVER THE PRINCIPAL TOLD THE THIRD PARTY OVERWRITES WHAT THE EXPRESS AGREEMENT . - THE MORE VAGUE THE MESSAGE IS , THE THIRD PARTY SHOULD FOLLOW UP WITH PRINCIPAL - A CONTRACT IS BINDING IF IT S UNDER ACTUAL /APPARENT AUTHORITY RATIFICATION - PRINCIPAL ADOPTS IT AFTER THE FACT THE NEGOTIATION HAPPENED - AGENT REPORTS TO CONTRACT WITHOUT AUTHORITY FROM PRINCIPAL ,SO THE CONTRACT BECOMES FORCIBLE LIKE THE PRINCIPAL WAS INCLUDED IN THE BEGINNING - AGENT HAS TO IDENTIFY A SPECIFIC PRINCIPAL F OR R ATIFICATION T O BE EFFECTIVE ,IT MUST MEET THESE R EQUIREMENTS - PRINCIPAL HAS CAPACITY ;HAS TO BE IN A LEGAL POSITION TO ENTER THE CONTRACT AT THE TIME (TOO YOUNG ,ABORIGINAL ,INSANITY ) - PRINCIPAL HAS TO RATIFY IN A REASONABLE AMOUNT OF TIME - PRINCIPAL HAS TO RATIFY THE ENTIRE CONTRACT - RATIFICATION HAS TO BE EXPRESSED CLEARLY OR IMPLIED L IABILITY CONTRACT TO PRINCIPAL AND THIRD PARTY (P3 PK), WHEN DO WE DECIDE WHEN PRINCIPAL IS LIABLE FOR THE CONTRACT ? 1) WHEN AGENT HAS ACTED IN THE SCOPE OF THEIR ACTUAL AUTHORITY /ENTERED INTO A CONTRACT , THAT WILL BE VALID ,EVEN IF THIRD PARTY DOESN T KNOW THE TERMS OF THE ACTUAL AUTHORITY 2) AGENT ACTS IN THE SCOPE OF APPARENT AUTHORITY ,CREATED BY PRINCIPALS REPRESENTATIONS TO THIRD PARTY ,AND IT IS REASONABLY RELIED ON FROM THE THIRD PARTY . (IF THIRD PARTY ACTUALLY KNEW THAT THE AGENT DIDN T HAVE THE AUTHORITY ,THEN IT IS NOT REASONABLE TO RELY ) - PRINCIPAL IS NOT LIABLE IF AGENT STEPS OUT OUTSIDE THE BOUNDS OF ACTUAL /APPARENT AUTHORITY IF AGENT IS ACTING UNREASONABLE ,THIRD PARTY SHOULD NOT RELY PRINCIPALS ARE LIABLE FOR ANY CONTRACTS THAT ARE RATIFIED www.notesolution.com U SUAL AUTHORITY IS WHAT A SOMEONE HAS IN A PARTICULAR POSITION (ALLOWS A PERSON APPOINTED TO A PARTICULAR POSITION TO EXERCISE THE AUTHORITY USUALLY ASSOCIATED WITH THAT POSITION ) IF PRINCIPAL IS A CORPORATION ,HOW DOES AGENT GAIN AUTHORITY ?THERE IS A CHAIN OF AUTHORITY , SHAREHOLDERS APPOINTMENT DIRECTORS AND OFFICERS CERTAIN AUTHORITY A GENT LIABLE TO THIRD PARTY -UNDER TORT , IT MIGHT COME UNDER DECEIT OR FRAUD -AGENT REPORTS TO ACT AS THE PRINCIPAL AND FAILS TO DISCLOSE THAT IT S ACTING AS AGENT -AGENT LACKS AUTHORITY AND ENTERS A CONTRACT (UNDER TORT ) -IF THIRD PARTY HAS BEEN MISLED , THEY WILL NOT BE THE PARTY THAT WILL HAVE TO BARE THE LOSS , AS LONG AS THE THIRD PARTY ACTED REASONABLE AGENT IS SUBJECT TO FIDUCIARY DUTIES (DUTIES TO ACT IN GOOD FAITH UNDER THE PRINCIPAL TO THEIR EMPLOYER 1) AVOID CONFLICT OF INTEREST BETWEEN PRINCIPAL AND AGENT (DO NOT SELL LAND TO YOURSELF ) 2) FIDUCIARIES CANNOT PROFIT FROM UNAUTHORIZED INFORMATION OR INFORMATION THAT ARISE FROM THE RELATIONSHIP 3) AGENT CAN T COMPETE WITH PRINCIPAL 4) AGENT CANNOT EXPRESS PRINCIPAL S INTEREST IF FIDUCIARY DUTIES ARE BROKEN ,AGENTS ARE STRICTLY LIABLE PRINCIPALS DUTIES TO THE AGENT : -MUST PAY THEM AND PROVIDE EXPENSES THAT MAY HAVE BEEN ACCUMULATED WITHIN THE NEGOTIATION H OW TO TERMINATE THE AGENCY :EITHER PARTY CAN CANCEL IT ,IF AGENT IS AN EMPLOYEE ,YOU MUST TERMINATE THROUGH IN ACCORDANCE THROUGH EMPLOYMENT LAW - PRINCIPAL MIGHT LOSE CAPACITY CERTAIN TYPES OF BUSINESS PARTNERSHIPS : -RISK MANAGEMENT ISSUES (IF AGENT IS EMPLOYEE ,VAGARIOUS LIABILITY APPLIES [RESPONSIBLE FOR EMPLOYEES ACTIONS ]) LECTURE 2 - DEFAULT ASSUMPTION IS TO PROTECT THE THIRD PARTY www.notesolution.com
More Less
Unlock Document

Only pages 1,2,3,4 are available for preview. Some parts have been intentionally blurred.

Unlock Document
You're Reading a Preview

Unlock to view full version

Unlock Document

Log In


OR

Join OneClass

Access over 10 million pages of study
documents for 1.3 million courses.

Sign up

Join to view


OR

By registering, I agree to the Terms and Privacy Policies
Already have an account?
Just a few more details

So we can recommend you notes for your school.

Reset Password

Please enter below the email address you registered with and we will send you a link to reset your password.

Add your courses

Get notes from the top students in your class.


Submit