Facebook
Home Contracts Page 2

Contracts

In Depth Overview of Principal

In Depth Overview of Principal

When an individual receives the authority to act on behalf of another, they are known as principal agents. A principal gives the authority, by way of investment or contract, to the principal agent. A contract is arranged in order to set up the guidelines on how the agent acts on behalf of the principal.

An example of a principal-agent relationship is how the shareholders of a corporation are investing within the entity, while the entity performs its duties of raising profits and becoming more productive. The principal in this situation are the shareholders, and the corporation acts as the principal agent. The shareholders may cancel the contract at any time, but while they are the principals, they elect officials within the corporation through a voting system which they have been given the right to do. 

An issue may occur based on the conflict of interest between the two parties. An example being, if the corporation needs to take one route for its benefit, and at the same time, the stock of the corporation may go down, which negatively affects the interests of the shareholders.

There is no set goal on which the principal may be satisfied since they are hiring an agent in order to do what they specialize in. The agent in this case is to perform to his or her maximum ability in order to satisfy the principal. The only way the principal may feel dissatisfaction is if their interest within the agent depreciates.

A principal agent has a fiduciary duty towards the principal. The duties of an agent include the following: (1) To perform the tasks specified within the terms of the contract to the best of their ability, while the principal agents do not have the authority to perform acts on behalf of the principal that are not stated within the agreement; (2) An obligation to relieve his obligations with due diligence and care; (3) The duty of avoiding any conflict of interest, not only between the two parties specified in the contract, but also any conflict which they may incur even though it is not stated within the agreement.

A principal agent is not to perform any additional duties which may conflict with a prior obligation to which he or she has committed. The main issue within the principal agent relationship directly involves the lack of full disclosure. The principal has the duty to update the agent on any information which relates to the transaction or the tasks the agent has on hand. The agent must do the same, and the agent has an extra obligation of not increasing his interest without increasing the principal’s. If an agent is acting on behalf of a principal, the agent must make sure the increase in interest between the two is relative.

Contract Law Simplified Background

Contract Law Simplified Background

Contract pacta sunt servanda, which translates to “agreements are to be kept.” The essential contract law basis is that contracts cannot violate the rights of either party to the contract.
The main contract law basis is to ensure that the contracts that parties enter into are honored by both parties. Contract law defines any agreement between two parties in which one agrees to provide something to another party in exchange for goods, services, or financial compensation as a contract.
Contract law defines most contracts as being made orally. One of the less understood or appreciated contract law basics is the idea that a purchase in a store for anything, ranging from a pack of gum to a high definition television, represents an oral contract. Contract law only prevents parties from entering into contracts that are trifling, indeterminate, or illegal.

Uncover the Functions of Contract Law

Uncover the Functions of Contract Law

Contract law has been construed historically that if ambiguous language is employed, then the contract will be interpreted in such a way as to give favor to the party that signed the contract, not the party that wrote the contract. Contracts law is derived from a common law heritage. 
Another major function of a contract is to document what each party to a contract is obligated to do for the other. Contract laws also serve to assign consequences in the event either party is unable to perform the duties taken up under the terms laid out in the original contract.
Contracts law is also meant to uphold the basic processes by which the economy functions in the United States and in all countries throughout the world, though not every country has a common law basis for understanding contract law.
Contract law in other systems may have a heritage derived from civil law, Islamic law, socialist law, and/or from tribal law. Depending on each country’s specific views of contracts, law systems in the country may assign more protection to the consumer or may afford more protection to the corporation.

Interpreting Contracts At A Glance

Interpreting Contracts At A Glance

One of the essential tenets of business contract law is that the terms of the contract must be one to which a When interpreting a contract there are several things that an arbiter or jury must examine. The first is to determine the intention of the parties to the contract. There are many ways to do so including the plain-meaning-rule.
When determining intent, the judgment must conform itself to the intent of the parties and must be alert to times when the parties’ intents deviate from the what would normally be expected. An interpretation must also seek to not reward fraudulent intentions which may have been held by a party to the contract.

All You Need to Know About Common Law Governance of Contracts

All You Need to Know About Common Law Governance of Contracts

Contract law is based in three different areas. The first, and rarer, basis for contract law is a specific statute governing a contract. The second area is the Uniform Commercial Code. The more pervasive foundation of contract law is common law. Common law is not written down or codified in any particular place. Common law is instead the tradition of law in a particular jurisdiction.
Common law as it reflects on contract law is influenced by the findings of British common law in effect at the time of the American Revolution in 1775. The common law decisions that have been handed down by individual states since British common law ceased to be the governing principle of the location and any relevant finding by a Federal judge.
Common law is a general term for any legal precedent that is taken from a judge’s individual ruling. The main statute which provides the foundation of English common law is based on the interpretation of the 1677 Statute of Frauds. It has been incorporated into the common law heritage of all fifty states in the United States at some point.
The main concern in a common law system regarding contracts is if one party is allowed to sue another person. Contract law in a common law system calls this idea the concept of privity of contract. In contract law, privity answers the question of whether an individual party has the legal standing to sue another party, as well as what the responsibility is of the party being sued. Privity in contract law says that rights cannot be extended to an individual who has not entered into the contract in question, and that a third party not involved in the contract has no liability for the terms of the contract.
Privity is a complicated but essential aspect in contract law in common law systems. The 1968 English case of Beswick v. Beswick examines the complications when two parties enter into a contract to provide for the welfare of a third party. The elderly Mr. Beswick and his nephew created a contract in which Mr. Beswick sold his company to his nephew. One of the terms of the contract was that Mr. Beswick’s would-be widow, Mrs. Beswick, be provided with stipend after Mr. Beswick’s death.
The nephew agreed to the contract, but after the death of his uncle declined to provide the stipend. The nephew claimed he was under no obligation to provide the stipend because his aunt had not been involved in the original contract. The court in this case upheld the nephew’s contention. However, because Mrs. Beswick was the administrix of his estate, and thus a party to the contract because the estate maintained an interest in the contract he was still compelled to uphold the terms of the contract.
Outside of circumstances such as that in Beswick v. Beswick where the third party assumes the interests in one of the original parties, the only other time a third party can become directly involved in a contract under the concept of privity inherent in a common law system is when one of the original parties to the contract has been acting on behalf of the third party from the beginning.
For instance, John is working for Joe. Joe and Jack enter into a contract. John would then be able to compel Jack to fulfill the contract because the duties in a contract can be transferred. If Joe were not working for John, John would be unable to force Jack to complete the contract.

Understanding the Power of Attorney

Understanding the Power of Attorney

When a principal agent relationship is created based on an arrangement of a contract, the power of attorney rights are automatically conveyed to the agent. The power of attorney held by the agent, is clearly specified within the contract on how to act on behalf of the principal. The agent in this case may also be referred to as an attorney-in-fact. The term attorney-in-fact has been implemented to decipher between them and attorneys of the law. The fact is represented by the fiduciary duty labeled based on the facts of the contract arranged.
The power of attorney is usually stated separately from the contract. This is due to the fact that others are to be shown that the agent has the right to act on behalf of his or her principal. Although the general power of attorney may be either written or oral, most entities require it to be in writing. When an attorney-in-fact, the agent has to be completely loyal and honest with his or her principal. There are many examples of principal agent relationships within real property law. 
Power of attorney is granted to a real estate broker to place offers on a house, when the principal is buying; or when accepting an offer on behalf of the principal, when the principal is the seller. An attorney becomes the agent when overlooking and creating the various contracts required, since the principal may not have the knowledge to do so, hence he relies on the attorney while the attorney is being compensated.
General power of attorney can be granted in most circumstances. For each industry, there are specified state laws regarding the guidelines on the ethical and procedural behavior the power of attorney must abide by. Each agent within various industries, are specialized, that is the benefit of why principals seek agents to perform their duties based on credentials and competence. The power of attorney will automatically be revoked upon the death of the principal, or if he or she become mentally ill. 
The only exception to such revocation is if it is clearly stated within the contract, that the agent was granted a “durable” power of attorney, in which there is no revocation involved. Majority of the time, it is more than beneficial for the agent to have insurance when catering to fiduciary duties towards others. This is in case the principal feels as if there was a breach of contract in where the agent had performed acts which were not specifically stated within the contract. The outcome would be a lawsuit in which in the best interest of the agent is to obtain insurance covering his or her agent responsibilities.

Easy Uniform Commercial Code Overview

Easy Uniform Commercial Code Overview

Background
The UCC, or Uniform Commercial Code, developed as an attempt to streamline business laws across different jurisdictions within the United States. The ten of the eleven Articles have been met with universal adoption.
The UCC was considered essential as a result of corporations engaging in interstate commerce more frequently throughout history. As interstate commerce proliferated, corporations complained about the fact that they were having to deal with what were sometimes radically different standards for completing a single commercial transaction. 
Articles of the UCC
There are eleven Articles which comprise the Uniform Commercial Code. Article 1 of the UCC is known as the General Provisions of the UCC, and the other Articles are: Article 2, Sales; Article 2a, Leases; Article 3, Negotiable Instruments; Article 4, Bank Deposits; Article 4a, Funds Transfers; Article 5, Letters of Credit; Article 6, Bulk Transfers and Bulk Sales; Article 7, Warehouse Receipts, Bills of Lading and Other Documents of Title; Article 8, Investment Securities; and Article 9, Secured Transactions.
In 2003, Article 2 and Article 7 were modernized in a major revision, though the revisions to Article 2 have not been adopted by any states yet. Although Article 6 is considered obsolete by the National Conference of Commissioners on Uniform State Laws, it remains in effect in many jurisdictions.
Despite being present in one document, each Article of the UCC bears only the slightest connection to any other. Most Articles bear little relevance on the others. The exception is that each Article uses terms defined in Article 1, and Article 9 covers the paperwork required to support the intermediate Articles.

Find Out the Responsibility and Legal Capacity to Contract

Find Out the Responsibility and Legal Capacity to Contract

Limited Liability Company
Similar to a corporation, the members of a limited liability company (LLC) are not liable for the debts or damages the LLC may incur. Another plus is that the members of the limited liability company will never be personally liable for contract agreements through the LLC. 
A limited liability company receives the benefits of each form of business entity, while avoiding the disadvantages each one bears. The avoidance of double taxation and also not having to file taxes through the LLC are some of the key benefits of its kind. The creation of the LLC entity in recent times has made it convenient for individuals to be able to accumulate the benefits of each form of business entity, taking the pros and minus the cons.

Agents
When an individual receives the authority to act on behalf of another, they are known as principal agents. A contract is arranged in order to set up the guidelines on how the agent acts on behalf of the principal. 
A principal agent has a fiduciary duty towards the principal. A principal agent is not to perform any additional duties which may conflict with a prior obligation to which he or she has committed. When a principal agent relationship is created based on an arrangement of a contract, the power of attorney rights are automatically conveyed to the agent. 
The power of attorney held by the agent, is clearly specified within the contract on how to act on behalf of the principal. The power of attorney will automatically be revoked upon the death of the principal, or if he or she become mentally ill. 
The power of attorney is usually stated separately from the contract since it is to be shown to others that the agent has the right to act on behalf of his or her principal. Each agent within various industries is specialized, which is the benefit of why principals seek agents to perform their duties based on credentials and competence.

Appropriation

Appropriation

The Prior Appropriation Doctrine has been created in order to meet the needs of western and arid states. An arid State refers to a State which has insufficient water supply or lack of rain. This Doctrine caters on a first come first serve basis, meaning whoever makes use of the water first has the superior right to the water. All appropriation laws are not similar when going from State to State, as each varies based on the demand and what the State deems as beneficial use of the water.

Expropriation is the taking away or surrendering of the permit or right an owner has to the usage of water. This usually occurs when an owner violates regulations or breaches his contract of what is stated on the permit. Overall, the Government has put its own regulations on bodies of water, but makes sure to leave room for flexibility so that the states could apply the rules according to their needs.  

12Page 2 of 2
Disclaimer: There is no confidential attorney-client relationship formed by using Laws.com website and information provided on this site is not legal advice. For legal advice, please contact your attorney. Attorneys listed on this website are not referred or endorsed by this website. By using Laws.com you agree to Laws.com Terms Of Use.
Facebook
©

Attorneys, Get Listed

Free Coupon
X