BLS 342: FINAL EXAM
49 Cards in this Set
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Agency
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a relationship between a principal and an agent
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Agency relationship
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the agent is authorized to act for and on behalf of the principal, who hires the agent to represent him
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Fiduciary
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person who has the duty to act primarily for another person’s benefit; ex. Lawyer is a fiduciary for their client
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Creation of the Agency Relationship:
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Consensual relationships formed by either informal oral agreements or formal written contracts. Two criteria for creation of agency relationship:
1. Must be legal, lawful purpose (ex. Cannot hire agent to kill someone)
2. Individual who doesn’t have contractual capacity cannot h…
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Agency relationships can be created on the basis of any of the following four forms of authority:
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1. By expressed agency or agency by agreement
2. By implied authority
3. By apparent agency, or agency by estoppel
4. By ratification
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Agency agreements don’t necessarily have to be in writing with two important exceptions:
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1. Must be in writing if agent will enter into contract with statute of frauds
2. Must be in writing if agent is given power of attorney
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Gratuitous agent
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One who acts without consideration (not paid for their services)
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Types of Agency:
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Expressed agency
Power of attorney
Durable power of attorney
Agency by Implied Authority
Apparent Agency (Agency by Estoppel)
Agency by ratification
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Expressed agency:
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When parties form an agency relationship by making a written or oral agreement
o Most common type
o Gives the agent authority to contract on behalf of the principal
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Power of Attorney:
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o establishes an agency that allows agent to sign legal documents on behalf of the principal
General vs specific power of attorney
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Durable Power of Attorney:
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o Written document of wishes for agent’s authority to not be affected by principal’s later incapacity (ex. Medical decisions)
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Agency by Implied Authority:
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o Agency by implied authority cannot conflict with any express authority
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Apparent Agency (Agency by Estoppel):
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o Agency formed when a principal leads a third party to believe that another individual serves as his agent but the principal had made no agreement with the so-called agent
o If principal attempts to deny that agency relationship existed, third party must demonstrate that he reas…
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Agency by Ratification
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o Agency that exists when an individual misrepresents himself as an agent for another party and the principal accepts or ratifies the unauthorized act
o Two requirements:
1. An individual must misrepresent himself as an agent to another party
2. Principal must ratify …
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Agency Relationships
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...
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Principal-Agent Relationship:
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· Typically exists when an employer hires an employee to enter into contracts on its behalf
· Most basic type of agency relationship
· Parties have agreed that agent will have the power to bind principal in contract
· Ex. Clerk at Abercrombie sells shirt t…
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Employer-Employee Relationship:
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· When an employer hires an employee to perform some sort of physical service
· Employee is subject to the employer’s control
· All employees are considered agents of the employer; however, not all agents are employees
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Employer-Independent Contractor Relationship:
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· Independent contractors cannot enter into contracts on behalf of the principal unless the contractor possesses authority from the principal
· Employer has no control over details of conduct of independent contractor
Ex. Building contractors, doctors, stockbrokers, lawyers …
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The Duties of the Principal
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The principal owes duties to the agent. Failure to fulfill these rights provides the basis for a tort or contract action against the principal
· Duty of compensation:
· Duty of reimbursement and indemnification:
· Duty of cooperation:
· Duty of safe working…
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The Duties of the Agent
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When an agent fails to fulfill his duties to the principal, that failure provides the basis for a contract or tort action against the agent
· Duty of loyalty:
o Act in the best interest of the principal, founded on trust
· Duty of performance:
o Must perform the d…
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The rights and remedies of the principal:
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o Constructive Trust
o Avoidance
o Indemnification
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The rights and remedies of the agent:
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o Tort and Contract Remedies
o Demand for an Accounting
o Specific Performance
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Business Ethics
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· Ethics is the practice of decisions about what is good/right
· Business ethics is the application of ethics to the special problems and opportunities experienced by businesspeople
· Ethical dilemma is when the there is no clear or right decision
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Social Responsibility
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· the expectations that the community imposes on firms doing business with its citizens
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WPH process of ethical decision-making
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Approach offers future business managers some ethical guidelines that provide a dependable stimulus lo ethical reasoning in a business context : Who (stakeholders) Purpose (values) How (guidelines)
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Golden Rule:
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Do unto others as you would have them do unto you
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Public disclosure test:
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If the public knew about this decision, how would you decide?
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Universalization test:
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o What would the world be like were our decision copied by everyone else
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Administrative law
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the substantive and procedural rules created by administrative agencies (government bodies of the city, county, state, or federal government) governing applications, licenses, permits, available information, hearings, appeals, and decision making
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Administrative agency
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A body created by the legislative branch (Congress, a state legislature, or a city council) to carry out specific duties
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Interstate Commerce Commission (ICC)
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Created by Congress near the end of the 19th century as a means to better control anticompetitive conduct; no longer exists as a separate agency
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Why are Agencies Created?
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Congress creates administrative agencies through enabling legislation that grants broad powers for the purpose of serving the “public interest, convenience, and necessity”
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The 3 Types of Agency Power
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· Rule making
· Investigation
· Adjudication
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Rule Making Agency Power
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Enabling statutes permit admin agencies to issue rules that control individual/business behavior. Failure to comply results in civil/criminal penalties. 3 types of rules: 1. Procedural: govern the internal operations of the agency. 2. Interpretive: explain how the agency views the mea…
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Investigation Agency Power
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o Enabling statutes grant agencies executive power to investigate potential violations of rules/statutes
o Powers include the power to issue a subpoena and a subpoena duces tecum
o Subpoena: an order to appear at a particular time and place and provide testimony
o Subpoena du…
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Adjudication Agency Power
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o Enabling statutes delegate judicial power to agencies to settle or adjudicate individual disputes that an agency may have with businesses or individuals
o After investigation, agency will hold administrative hearing before and ALJ
o An administrative law judge (ALJ) presides ov…
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3 Types of Admin Agencies
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Executive, Independent, Hybrid
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Executive Agency
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o The administrative head of an executive agency is appointed by the president with the advice and consent of the U.S. Senate and may be discharged by the president at any time for any reason
o Can make rules covering a broad spectrum of industries and activities and tend to focu…
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Independent Agency
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o governed by a board of commissioners appointed the president with the advice/consent of the Senate. "commissions"
o Narrower authority over facets of a particular industry, focus on such economic regulation
o Commissioners serve fixed terms and cannot be removed except for c…
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Hybrid Agency
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o Hybrid agencies do not fall clearly into one classification or the other
o Ex. The EPA was created as an independent agency, not located within any department of the executive branch, yet the head of the EPA serves at the whim of the president
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Administrative Procedures Act (APA)
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limitation on how agencies are run
· Before APA agencies could decide on their own how ro make rules, conduct investigations, and hold hearings
· Very specific guidelines govern rules making by agencies; two most common are informal and formal, with some exceptions like hybrid…
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Informal rule making
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The proposed rule is published in the Federal Register with opportunity for public comment
-Not required to have hearing, but can accept oral testimony if it wishes
-Not required to respond to all comments
-Publishes final rule with statement of basis and purpose in the Federal R…
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Formal Rule Making
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o All rules must be enacted by an agency as part of a formal hearing process that includes a complete transcript
o Begins with publication of a notice in the Federal Register and public hearing with testimony and cross-examination
o The agency makes and publishes formal findings
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Hybrid Rule Making
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o Hybrid rule making combines features of formal and informal rule making
o The starting point is publication in the Federal Register, followed by the opportunity for submission of written comments, and then an informal public hearing with a more restricted opportunity for cross-…
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Exempted rule making:
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o APA allows an agency to decide whether public participation will occur in proceedings about military or foreign affairs, agency management or staff, and the agency’s public property, loans, grants, benefits, or contracts
o Why? Military/foreign affairs often need speed and secr…
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Limitations on Agency PowersPolitical, Statutory, Judicial, Informational
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Political, Statutory, Judicial, Informational
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Freedom of Information Act:
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1966, FOIA requires that federal agencies publish in the Federal Register where the public can obtain info on: How they get and spend their money, Stats/info they have collected on a given topic, Any records the government has about the individual seeking information, Exemptions to F…
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Government in Sunshine Act:
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This act requires that agency business meetings be open to the public if the agency is headed by a collegiate body and that agencies keep records of closed meetings
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Privacy Act
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a federal agency may not disclose information about an individual to other agencies or organizations without that individual’s written consent
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BLS 342: EXAM 1