Agent
Section 2295 of the California Civil Code states:
"An agent is one who acts for or represents another, called the principal, in dealings with third person. Such representation is called an agency."
An agent is one who acts for or represents another.
An ag
Types of Agents
-General Agent
-Special Agent
-Power of Attorney
General Agent
Has the authority to perform all necessary acts for the principal within a specified area.
Example:
-managing finances
-arranging the conseratee's care
-making other important decisions (signing a contract)
Special Agent
Is limited to those acts specifically set forth in the agency agreement.
The agent normally has NO power to sell the owner's property, buy property for the buyer, or contractually bind the owner.
Power of Attorney
A written agreement whereby a principal appoints an agent, known as attorney-in-fact, to act in their place.
Attorney-In-Fact
Should not be confused with an attorney-at-law.
Civil Code Section 2450, Statutory Power of Attorney form.
Powers of attorney are normally given for specific purposes, such as to sign a deed when the owner is not available; this is an example of a specifi
How Agencies are Created
-Express Agency
-Implied Agency
-Ostensible Agency
-Agency of Estoppel
-Agency of Ratification
-Dual Agency
-Agency Disclosure
Express Agency
An agency created by a specific agreement, either written or oral.
Implied Agency
Not the result of a stated agreement but is created by the actions of the parties that indicate reasonable intent to form an agency.
Be aware, promises to serve the best interest of another COULD BE construed as an agreement to act in an agency capacity e
Ostensible Agency
California Civil Code Section 2298 states:
"An agency is either actual or ostensible"
If one person causes others to believe that another person is their agent when that is not true, the courts can declare the principal bound due to the existence of an ap
Agency of Estoppel
An agency created when a principal's conduct led another to believe in the existence of the agency and thereby to act to his or her detriment.
When an ostensible agency is created and a third person reasonably acts to that person's detriment basedon the b
Estoppel
The legal doctrine that a person cannot raise a right of defense after their words or actions to the contrary led another perty to act to their detriment.
The doctrine of estoppel is one of equity to achieve justice.
Agency of Ratification
An agency created by a principal's approving an unauthorized act of another.
A principal can form an agency by ratification by accepting the benefits of an agreement made by an unauthorized agent or by an agent who has exceeded their agreement.
A principa
Ratification
Approval of an agreement to which the approving party was not legaly bound. By ratification, the party agrees to be bound by the agreement.
Dual Agency
An agency situation in which the agent represents more than one party to the transaction.
A dual agency exists when an agent represents two principals who are negotiating wich each other and have conflicting interests.
To avoid the possibility of a court
Agency Disclosure
California Civil Code Section 2375 requires the agent to provide a written agency disclosure to the parties for the sale, purchase, exchange, or lease of one to four residental units and mobile homes to prevent misunderstandings by buyers and sellers as t
Disclosure
Written explanation of the types of agency relationships that are possible.
Elect
A decision about the type of agency relationship for the transaction.
Confirm
Written signed confirmation of agency (usually part of a purchase agreement)
Proof of Agency
Can be established by circumstantial evidence with relevant factors including: The situation of each party and their words and actions. The existence of an agency is ordinarily a question of fact for the jury.
The burden of proving the existence of an age
Authority of Agents
1 -Express Authority
2 -Implied Authority
3 -Customary Authority
4 -Delegation of Agent's Authority
Express Authority
The stated authority of an agent (written or verbal)
Equal Dignities Rule
If an agency act must be in writing, the agency authority to perform the act also must be in writing.
Implied Authority
Understood (not express) authority that is reasonably necessary to carry out the agency.
Customary Authority
Authority implied by virtue of an agent's position.
Delegation of Agent's Authority
...
Fiduciary Duties of an agent
1 -Fiduciary Duty
2 -Full Disclosure
3 -Due Care
4 -Loyalty
5 -Honesty
6 -Accounting
7 -Integrity
8 -Obedience
9 -Agent's Duty to 3rd Persons
Fiduciary Duty
The duty of trust and confidence.
Full Disclosure
Accounting principle that dictates that companies disclose circumstances and events that make a difference to financial statement users.
Due Care
Reasonable (nonnegligent) care.
Loyalty
Faithful adherence to one's promise, oath, word of honor, etc.
Honesty
A character trait of a person who is open and truthful in dealings with others.
Accounting
A comprehensive system for collecting, analyzing, and communicating financial information
Integrity
Following a strict code of conduct or standard of values.
Obedience
A form of compliance that occurs when people follow direct commands, usually from someone in a position of authority.
Agent's Duty to 3rd Persons
An agent has a duty of honest and fair dealings with others.
The principal and agent could be held liable for the agent's misrepresentation, fraud, or failure to disclose to a third party detrimental information that the agent knew or should have known.
M
Liability of Agents
For any damages of principal if agent breaches a duty; to principal for any torts or other acts committed in excess of express or implied authority
Tort
A civil wrong or violation of a duty.
Liability of Principals
Principal will be liable for torts committed by an agent if there is a principal-agent relationship and the tort was committed by the agent within the scope of that relationship
Respondeat Superior
The doctrine that the master is liable for the acts of his or her servants (applies to agency and employment relationships)
Breach of Agency
If the agent violates his or her duties to the principal, the law will hold the agent liable for damages caused by that breach of duty. The remedies available to a principal vary depending on the duty violated. Wrongful acts of an agent toward a third par
Agency Coupled with an Interest
Agency in which an agent has a financial interest in the subject matter of the agency.
The agency is created to benefit the agent or a third party.
California Civil Code Section 2356 states that an agency coupled with an interest cannot be terminated by d
Termination of Agency
1 -Expiration of its term
2 -Extinction of the subject matter
3 -Death
4 -Renunciation
5 -Incapacity of Agent or Principal
6 -Agreement of the Parties
7 -Full Performance
8 -Bankruptcy
Expiration of its term
An agency automatically ends with the expiration of its stated term.
Extinction of the subject matter
The destruction of the property automatically terminates a listing or management agency agreement in the absence of any agreement. Impossibility terminates the agency.
Death
Because an agency is a personal relationship, death of either the principal or the agent terminates the agency.
If either the principal or the agent is a corporation, the death of corporate officers would not terminate the agency because a corporation is
Renunciation
Because an agency requires consent of the parties, either the principal or the agent can renounce the agency.
If a party wrongfully breaches the agency, that party could be liable for damages.
Incapacity of Agent or Principal
If the agent is no longer capable of acting as an agent, or the principal becomes mentally incapacitated, the agency terminates.
An agent who loses their license would be incapable of performance, so the agency would terminate.
Agreement of the Parties
The principal and the agent can mutually agree to terminate their agency.
Full Performance
Satisfactory completion of the object of the agency terminates the agency.
Bankruptcy
The trustee in a bankruptcy can terminate an agency or allow it to continue.
If the bankruptcy of an agent impairs the agent's ability to perform, the principal can terminate the agency.