An agency relationship is formed between two parties when one party (the agent) agrees to represent another party (the principal). Normally, all employees who deal with third parties are considered agents. Principal-Agent relationships are defined as the understanding that the agent will act for and on behalf of the principal. (Cheeseman) The agent assumes an obligation of loyalty to the principal that he will follow the principal’s instructions and will neither intentionally nor negligently act improperly in the performance of the act. An agent cannot take personal advantage of the business opportunities the agency position uncovers. A principal-agent relationship is fiduciary, meaning these obligations bring forth a fiduciary relationship of trust and confidence. As such, an agency relationship is governed by employment law. If an agent acts within the scope of his/her authority, a principal is bound by the act of his/her agent. Moreover, a party is responsible for any action or inaction by the party or the party’s agent. A …show more content…
Even though the principal does not authorize, ratify, participate in, or know of the misconduct, he/she may be held for an agent’s tort committed in the course and scope of the agent’s employment. As noted in Case Study 1, an agent is to comply with all lawful instructions received from the principal and persons designated by the principal concerning agent’s actions on behalf of the principal. A principal who is under a duty to provide protection is subject to liability to such others for harm caused to them by the failure of such agent to perform the duty. A principal is not relieved from the separable part of a contract which he/she authorized the agent to make by the fact that the agent under took. Even where the agent’s unauthorized act constitutes a fraud on both the principal and the third person, the partial validity rule is applicable.
Andrea may decide not to inform the limited partners about the misrepresentation of Skyline Views’s financial statements; to avoid conflict, this decision permits Ed to deceive the company and limited partners. In addition, by deciding not to inform the limited partners of Ed’s deceit, Andrea would be disregarding the American Institute of Certified Public Accountants Code of Professional Conduct in her being unreliable, dishonest and deceitful. Andrea has the responsibility of protecting her client, which involves encouraging the correction of financial statements in order to prevent suspicion during audits that could lead to fines and imprisonment. Andrea’s second option is to inform the limited partners about how misrepresentations of Skyline Views’s financial statements are permitting Ed to claim a higher management fee; this decision will fulfill her due diligence obligation to the limited partners while maintaining her integrity as a certified public accountant in supporting the American Institute of Certified Public Accountants Code of Professional Conduct.
Even though the contract was properly formed, there was a misrepresentation in Perez’s offer when he said that plaintiff “would be managing the sizeable workload of the company rather than bringing in business.” Judge Scarpulla, ruling for the lower court, said that to claim for fraudulent inducement, a plaintiff must show
Ans. 6 The Court can overrule the decision for terminating Paul as he was not involved in the scheme. Due to his honesty he even admitted to be aware of the scheme. Moreover, no fraud was found in his facility and he should be held responsible for the warehouse for which he is in charge. Furthermore, higher management should be held responsible for not keeping an eye on the activities of supervisors at different locations.
“Agency relationships are formed by the mutual consent of a principal and an agent.” (Cheeseman, p.487) Our book goes on to cite the Restatement (Second) of Agency,
The agency problems or conflicts are continuously happening between the principal and the agent. It particularly arises when an interest conflict occurs between the principal and the agent. In terms of finance, there are two core agency relationships; managers and stockholders and managers and creditors. To balance the interests and satisfactions between managers and stockholders which helps firm to improve performance, there are a variety of different measures have been generated and implemented by Telstra in order to optimize the bond and monitoring costs.
If an agent freely performs an action, then the agent is responsible for the action.
Also, around 5,300 employees were found to be involved in the scheme over a period of 5 years. In this case, if the defendant is liable, how should they be prosecuted for their fraud? Aggressive sales goals push employees to break the rules. “On average, 1 percent of employees have not done the right thing, and we terminated them.
The framework is also responsible for the governing of specific agencies and their policies, as mentioned briefly before, and also which agency has responsibility for a particular experiment. The delegation of responsibility is laid out in great detail in large tables, showing specifically which agency is to assume responsibility. If two or more agencies have potential jurisdiction, then one agency is considered the lead agency, as the other ones are then subordinate, as mentioned earlier.
Accountability defined as the responsibility of an individual in a position of an employee or student. In this section, I am going further to mention some situations and how does this situation demonstrate the responsibility that reflected from the dimensions of my personality, including conditions from communication, diversity awareness, decision-making and problem solving. First am going to point at some of my situation that I experienced as a student and then build it up to the situation that I faced in the work placement program as an employee.
A leader is held responsible for each subordinate’s actions (Boseman, 2008). As you get credit for the valuable things they do, you are also held liable for their inadequate performance and are required to resolve
XYZ agency is a preschool setting dedicated to help children and their families with kindergarten preparation, and the organizational structure that helps to contribute to the process is: nutrition health services, mental health services, family services, education services, outreach services, disability services, and social and emotional support. According to XYZ agency, their vision statement notes, is to provide resources for the evolving needs of community children and families, in support of efforts to achieve their goals. Services provided by the XYZ agency include: monitoring medical needs where the agency performs vision, dental, and hearing test. The agency provides training on health and wellness behavior management by funding
represented as a partner, in a partnership or with one or more persons not partners, the purported partner is liable to whom the representation is made, if that person is relying on the representation enters into a transaction with actual or perpetual partnership. If the representation, either by purported partner or a person with the purported partners consent, is made in public manner, the purported partner is liable to the person who relies on the purported partnership, even if the purported partner isn't aware of being a partner. Also, if partnership liability results, purported partner is liable with the respect to that liability as if the purported partner was a
The delegator is accountable for the acts of delegation and incur liability if found negligent in the process of delegating and supervising; while the delegate is accountable for the completion of the delegated task. The delegator is accountable for the transfer of responsibility and authority to a competent delegate (Porter-O-Grady & Malloch, 2016). The distinct concepts of accountability and responsibility are the key elements in the effectiveness of the delegation process. The difference of “accountability and responsibility relates to their orientation” (Porter-O’Grady & Malloch, 2016, p. 53). Responsibility emphases on the work, the competence of the delegator and delegate, the efficiency of the processes, the quality of work, and the excellence of the application; while, accountability focuses on the issues of outcome and demands attention to the effects of the work (Porter-O’Grady & Malloch,
Part 2 of Employer Duties and Rights- management rights, subcontracting, just-cause discipline and discharge, and safety standards.