Video: Terms Related to Principals and Agents

In this lesson, dive deep into the legal focused terminology that can make or break one's understanding of the principal-agent relationship. Nick Palazzolo, CPA, decodes complex terms like "respondeat superior", "novation", "ratification", "fiduciary duty", "estoppel", and "scienter", succinctly clarifying their meanings and implications in various legal scenarios. He lays out the groundwork for mastering these concepts, essential for any professional navigating the intricacies of contract and employment law. With illustrative examples and practical applications, grasp the nuances of how these terms can determine liability and the obligations that agents owe to their principals. Whether it's the legal doctrine holding employers accountable for employee actions, or the intricacies of ratifying unauthorized contracts, this lesson prepares you to handle questions related to these critical legal principles with confidence.

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Video Transcript

Instructor: Nick Palazzolo

Nick Palazzolo is head instructor of ExamPrep.ai CPA Review. Nick's teaching style is engaging & upbeat, combining practical Big 4 tax & assurance expertise with years of 1-on-1 coaching. His lessons are concise and emphasize what you need to know to pass. Whether you're a recent grad or working full-time, we’re confident you can conquer your CPA exams with Nick’s review.

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Here are some terms to memorize. Gotta love some of these being those Latin terms and legal terms. We've got respondeat superior. This is the legal doctrine according to which an employer is responsible for the actions of its employees performed during the course of their employment. Now, these will come up throughout just varying situations. You'll just need to know what these are to answer the question, or you can see a multiple choice question asking, giving a definition and asking which term it's talking about or giving one of these and having you give the definition out of four possible choices. So make sure you memorize these terms. We've got novation. This is the process of substituting a new contract or agreement for an existing one, effectively replacing the original parties or obligations with new ones. You can see a lot of this in contract law as well. This is, again, just definitely know all these terms. Ratification. This is the act of a principal approving or confirming an unauthorized act or contract made by their agent. By ratifying the act, the principal becomes bound by it. We'll see pretty much all of these coming to play later on. Fiduciary duty, a legal obligation of loyalty and trust that requires one party known as the fiduciary to act in the best interests of another party. Estoppel, this is a legal principle that prevents a person from asserting a claim or right that contradicts their previous actions or statements. And lastly, scienter. This is a legal term derived from Latin. Yeah, we got a lot of Latin here. If you wanted to know the Latin origins, there you go. In the context of torts and securities law, scienter refers to the mental state of a person who intentionally or

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Agency & Contract Law

Module: 2 Concepts, 34 Videos

Principals & Agents: Authority, Duties, and Liabilities Overview

2:02

Introduction to Principals and Agents

3:30

Formation of Agency

5:58

Terms Related to Principals and Agents