3. Third party’s rights against an
undisclosed principals are subject to two
exceptions:
4. What is: The principal’s liability is limited to the
agent’s actual authority, except that a 3rd
party cannot sue if:
1. The principal for payment under contract if
the principal made a good-faith settlement
on the account with the agent
2. the 3rd party expresses intention to hold the
agent liable for the contract
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5. Undisclosed principal’s right against a
third party are limited in these 4
circumstances.
6. What is:
1. Agent Fraud,
2. Enforcement would impose a substantial
additional burden (“provide all that may be
required”),
3. Contract specifies agent’s personal performance,
and
4. In breach of contract suits a judgement against
the agent destroys the undisclosed principal’s
right of recovery against the 3rd party?
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7. These six situations create agent’s liability
to a third party even when the principal
is disclosed.
8. Home
What is:
1. Agent breaches implied warranty of authority,
2. Agents acts on behalf of minor/mentally incompetent person and
the 3rd party is unaware that the principal cannot contract,
3. Agent purported to act personally and did not disclose the
principal,
4. Agent voluntarily guarantees performance of principal under the
contract, and
5. Agent has no authority to collect money and does.
6. Agent is liable for fraudulent or malicious acts even under
principal’s direction?
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What is the agent can assert:
1. Breach of contract when both agent and 3rd party agree the
contract obligates the agent,
2. Breach of contract when the principal is undisclosed
(principal has superior right),
3. Personal defenses that the principal or agent performed the
contract, that the 3rd party failed to perform, or that the statue
of frauds or limitations precludes recovery, and
4. With disclosed/partially disclosed principal’s consent, the
agent can assert the principal’s defenses against the 3rd
party?
11. A person or an entity that is employed to
act for the principal in a specific
transaction or only for a particular
purpose or class of work?
13. An insurance producer whose authority is
limited by contract with an insurer to
soliciting applications for insurance and
performing other acts directly incident to
those activities
20. What is specified in the contract?
What is written or oral communication that severs
the producer’s actual authority?
What is notifying all parties that the producer
relationship has ended, plus collecting all
application forms and stationary?
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24. What is the insurer knew what the agent
knew?
Any knowledge possessed by a general
or special agent is considered to be
possessed by that agent’s principal
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25. These six components are essential for
insurance contracts
26. What is:
1. Subject matter of the insurance
2. Loss exposures insured
3. Premium
4. Insurance contract duration
5. Coverage amount, and
6. Identities of parties? Home
27. The liability of a principal who commits a
tort against a third party
34. What are:
General agents (broadest authority)
Special agent
Broker
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Editor's Notes
Created for reinforcement training of concepts within CPCU 530 Business Law for Insurance Professionals
For disclosed and partially disclosed principals, the agent is liable for agreements made until the 3rd party elects to enforce the contract against the principal instead of the agent.
