AFM231 Chapter Notes - Chapter 13: Secret Profit, Uberrima Fides, Fiduciary

86 views7 pages

tanscorpion990

13 Sep 2015

School

University of Waterloo

Department

Accounting & Financial Management

Course

AFM231

Professor

Robert Timberg

For unlimited access to Textbook Notes, a Class+ subscription is required.

Document Summary

Agency: the relationship between 2 ppl that permits a person (agent) to affect the legal relationship of another (principal) binding on principal as if they directly entered them herself. Agency is about representing another in such a way as to affect the latter"s relationships with the outside world. Acting for someone else and doing business on the person"s behalf. In almost every business transaction, at least one party is acting as an agent. Relationships allows businesses to conduct a wide array of transactions. Law of agency: law governing the relationship where one party, the agent, acts on behalf of another, the principle. Derived largely from tort and contract law. Become an agent when : when relationship arises by contract between parties, relationship by conduct, not specifically agree to an agency relationship but through word and conduct outsiders are led to believe the relationship is agency.

Related Questions

Business law Agency and partnership 1.The creation of an agencyalways required a written document authorizing the agent to act forthe principal and signed by both the principal and the agent.T/F

2.No consideration is required to create an agency relationship.T/F

3.Failure to notify partner with whom an agent has dealt of hertermination can create liability to those parties under the theoryof apparent authority. T/F

4.Liability for the tortious acts of an agent will depend uponhow much control the principle had over the agent. T/F

5.General partner stand only to lose their investment in thepartnership if the partnership goes broke. T/F

6.Under the doctrine of respondent superior the principal isliable for any harm caused by his agent, when the agent is actingwithin the scope of his authority. T/F

7.If the partners fail to write down the proportional ownershipinterest then they will be presumed to be equal partners. T/F

8.In the absence of a written agreement, any partner can refuseto allow anyone to become a partner in his partnership, since it isa voluntary relationship. T/F

9.What is known by the agent is presumed to be known by theprincipal. T/F

10.A limited partnership only has limited partners. T/F

11.Limited partners have a limited right to manage thepartnership affairs. T/F

12.Partners cannot use the general partnership agreement to denythe claims of creditors of the partnership; if the assets of thepartnership are not enough to the debt of the partnership thenpartners are personally liable for the debts of the partnership.T/F

13.A partnership is not a tax paying entity, but must file a taxreturn. T/F

14.The principal of Marshaling of assets means that creditors ofan individual partner must first exhaust his assets before takingany partnership property. T/F

15.The statute of frauds does not generally require anypartnership agreement to be in writing. T/F

violettortoise959

Scenario Description:

Overview: James Pratt has just been tasked with handling international clients. He needs to close a deal with Norio Tokunaka from PopWear that has already been thoroughly worked out with Michaelâs predecessor, Roger Small. Michael is unaware of the need to establish a relationship with Norio before he discusses business. Norio becomes disenchanted and refuses to sign the deal.

Profile:

James Pratt is the Director of Foreign Sales at Mustang Jeans, a U.S. company. After working at Mustang as a real estate attorney for six years, acquiring property for retail and manufacturing, Michael moved into sales at an executive level.

James is very much a no-nonsense straight-ahead kind of guy. He is friendly, but not big on small talk. He fits the stereotypical American businessman in many ways: informal, a little loud, all about money, very direct and forthright. Michaelâs career has centered in national salesâthis is his first foray into international business. Mustang Jeans is reorganizing to increase efficiency. All managers are now assuming larger territories.

Norio Tukunaka has worked at PopWear, a large Japanese retail clothing chain for his entire career. He has also been working with American companies for many years, importing a variety of products. Most of these American companies are alliances that were formed by Norioâs superiors, many years before. All of Norioâs accounts are pre-existing accounts as opposed to newly created accounts. This year, PopWear is expanding its contemporary clothing line, which includes adding new suppliers and new brands.

In his current position as Vice President of Merchandising, Norio is responsible for expanding the contemporary clothing line, which includes adding new suppliers and brands for PopWearâs 36 stores throughout Japan.

Norio has been working on a deal with Michaelâs associate Roger Small for a very long time. Michael has just taken over this region. Rogerâs report indicates that the Norio account is a done deal, with only logistics and details remaining. Michael and Norio are having their first meeting.

Scene Set-up: Norio arrives at Michaelâs office after arriving from Japan.

Scene Location: Michaelâs office at Mustang Jeans corporate headquarters in the U.S.

The Meeting - Summary: Michael spends less than a minute building rapport with Norio. He then begins to talk about signing the deal that had been previously worked out with Michaelâs associate Roger. Norio wants to continue to talk about good Japanese food and seems insulted that Michael doesnât like eel. Michael continues to press for the deal but Norio is very evasive.

Michael then gets interrupted by his assistant notifying him of his next appointment. He apologizes to Norio about the short amount of time that he has to spend with him.

3 Days Later â Norio comes back and Michael apologizes for the prior meeting. When asked to sign the deal again, Norio suggests that heâs been talking to other companies in the past few days in New York. He doesnât commit to the deal and says heâd enjoy hosting Michael in Japan and hopes they can maintain their relationship. He leaves before signing the deal to catch a plane.

Afterthoughts â Summary: Michael notes his frustration with the interaction. He acknowledges that he should have waited for Norio to start talking about the deal first. He understands that Japanese businesspeople place a high priority on relationships but also points out that he didnât have a long time to devote to small talk when it was unclear whether Norio was going to sign the deal or not.

ANSWER THE QUESTIONS BELOW!!!!!!!!!!!! THANKS

1. How did the differences between Japanâs and the United Statesâ national cultural values affect communication between Norio and Michael?

2. What information should Michael have possessed before meeting with Norio?

3. Why is Norio acting somewhat evasive with his responses? What is Norio hinting [when he mentions that Roger likes sushi]?

4. What could Michael have done better in the second meeting to continue the business relationship?

5. How can business communicators effectively learn more about different cultures? Should business communicators memorize isolated facts (e.g., a cultureâs typical greeting or attitude toward punctuality) or try to create a more holistic picture?

6. Besides broad cultural values and differences, what other main factors often vary between cultures and may have influenced the interaction between Michael and Norio?

7. Despite their many differences, do Michael and Norio share some common goals? If so, what are these goals and how might Michael have used some persuasive communication techniques to emphasize these shared goals?

8. What can business communicators do to enhance their cross-cultural communication skills?