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Day 40 ……10/23

Day 40 ……10/23. What 3 benefits are available under the Social Security Act?. Agency Law. Objective 3.02 Understand agency law. What is agency law?.

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Day 40 ……10/23

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  1. Day 40……10/23 What 3 benefits are available under the Social Security Act?

  2. Agency Law Objective 3.02 Understand agency law

  3. What is agency law? • Area involving relationships created between two parties in which the principal gives authority to an agent to act on the principal’s behalf in business transactions with a third party. Review: What is vicarious liability?

  4. Agency Definitions • Principal • Individual who gives authority to the agent. • Agent • Individual employed by principal to work with the third party. • Third party • The person or company whom the agent deals with on behalf of the Principal.

  5. Madison represented Olivia in a transaction when Olivia sold her island property to Taylor. Who is the agent? Who is the principal? Who is the third party?

  6. Types of Work Relationships • I. Principal-Agent Relationship • “Genuine” agency relationship • Agent conducts business on behalf of the principal (it is as if the principal has acted)

  7. II. Proprietor-Independent Contractor • Proprietor is an individual or business that hires someone to perform a task • Independent contractor (plumber, electrician, lawyer, etc.) works for the proprietor • Independent contractor cannot act on behalf of proprietor without expressed permission

  8. III. Master-Servant Relationships • A master is a person who has the right to control the actions of another person • Actions include where to work, what time to arrive at work and tasks to complete at work. • The person performing the actions is the servant • At times, the interactions between employer-employee are considered to be master-servant

  9. Authority

  10. Authority - Actual • When the principal intentionally gives express and implied powers to the agent to act for him/her. • Express Powers • written or spoken. • Implied Powers • created by the agent’s actions.

  11. Authority - Apparent • Also called, agency by estoppel. • Occurs when a principal, intentionally or negligently, causes or allows a third person to believe that an agency relationship exists, when there is no express agency. • Created by law or circumstance. • Principal remains liable for the agent’s actions.

  12. Day 41…….10/24 Which agent relationship requires expressed permission in order to act on behalf of person/company?

  13. Types of Agents

  14. General Agent • Given authority by principal to perform a VARIETY of tasks. Special Agent • Authority restricted to certain, specific tasks. Subagent • An agent appointed by another agent with the knowledge and consent of the principal.

  15. Agent’s Agent • An agent appointed by another agent without the knowledge and consent of the principal. Co-agents • Two or more agents working together. Partially Disclosed Agent • Given authority to work with a third party but forbidden to reveal identity of the principal.

  16. Gratuitous agent • Agent that works for free • No contract exists between agent and principal • Agent can terminate relationship at any time

  17. Duties

  18. Agent to the Principal • An agency relationship is fiduciary in nature; a good faith relationship based on trust • Agent must protect the interests of the principal

  19. Duty of loyalty • Duty to abide by all lawful instructions • Duty of confidentiality • Duty to act with reasonable care • Duty to account for funds (accounting)

  20. Principal to the Agent • Compensation • Payment for services rendered • Reimbursement • Payment for expenses incurred by the agent on behalf of the principal • Indemnification • Payment for losses incurred by the agent on behalf of the principal

  21. Cooperation • Principal must allow agent to perform his/her tasks • Principal must not make agent’s job difficult or impossible to perform

  22. to Employees • Reasonable Treatment • Safe Working Conditions • Fair Labor Standards • Military Service - Must rehire if able to perform job. (Military Selective Service Act of 1950) • Voting – time of with pay to vote

  23. Termination of Agency

  24. Review:How are contracts terminated/discharged?

  25. By operation of law: • Death of principal or agent • Either party becomes insane • Bankruptcy of principal • Destruction of subject matter • Agent’s objective becomes illegal

  26. Fulfillment of the agency purpose • The agent completes his/her task • Mutual consent • Both agent and principal agree to end relationship • Expiration of time • Only applies if the agent is contracted to perform duties within a certain period of time

  27. Day 42….10/25 A rich and handsome man named James Leonard was murdered on a Sunday afternoon. At the time of the murder there was: the maid, the cook, the butler, the gardener and the wife. Maid: I was fixing the table. Cook: I was cooking breakfast. Butler: I was polishing the silverware and the dishes. Gardener: I was planting tomato seeds. Wife: I was reading a book. Who did it?

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