Week 4 Individual Assignment
Published on Sep 26, 2022
Agency Theory
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PRESENTATION OUTLINE
Dennegar Liability
Brian Pho
Welcome to the Slide show, Professor, and class. My name is Brian Pho, and I will discuss the Dennegar Liability Case.
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MBA 530 Legal and Ethical Dimensions of Strategic Management
3 October 2022
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Agenda
- Overview
- Dennagar and Knutson's relationship
- Agency Law
- Contract Liability
- Summary
- References
In the Haiku Deck Presentation, I will discuss the schedule of what will be covered within the following several slides.
To start us off, I will talk about the overview and give you insight into the case study before getting into detail about why Dennegar should be held liable.
The following section will be about Dennagar and Knuston's relationship, where we discuss the breakdown and how each individual's role connects to the case.
One of the main topics will be agency law and how it supports the idea of Dennagar being held liable for the credit card balance.
The next topic will be contract liability, the background behind the constitution of a contract, and how they were both in an agreement. Contract liability connects two parties in a deal that holds Dennagar liable.
The summary will cover the overall case and topics mentioned to prove that Dennegar could be held liable since he met several of these critical points.
Lastly, I will follow it up with a list of References.
To start us off, I will talk about the overview and give you insight into the case study before getting into detail about why Dennegar should be held liable.
The following section will be about Dennagar and Knuston's relationship, where we discuss the breakdown and how each individual's role connects to the case.
One of the main topics will be agency law and how it supports the idea of Dennagar being held liable for the credit card balance.
The next topic will be contract liability, the background behind the constitution of a contract, and how they were both in an agreement. Contract liability connects two parties in a deal that holds Dennagar liable.
The summary will cover the overall case and topics mentioned to prove that Dennegar could be held liable since he met several of these critical points.
Lastly, I will follow it up with a list of References.
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Overview
- Dennegar allowed for Knutson to conduct his financial affairs while he was hospitolize
- Knutson passed away a several years later
- Dennegar is held liable for the credit card charges under his name
To introduce the Dennegar and Knutson case, it all connects back to principal and agent concepts.
Dennegar allowed Knutson to take control of his financial affairs when he was hospitalized. Dennegar could not pay his mortgage and expense, which was why Knuston took control.
Several years later, Knutson passed away, and Dennegar received a credit card for exactly $14,752.93 under his name. Dennegar had mentioned that he was unaware of these charges and refused to take ownership.
Dennegar allowed Knutson to take control of his financial affairs when he was hospitalized. Dennegar could not pay his mortgage and expense, which was why Knuston took control.
Several years later, Knutson passed away, and Dennegar received a credit card for exactly $14,752.93 under his name. Dennegar had mentioned that he was unaware of these charges and refused to take ownership.
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Dennegar and Knutson's relationship
- Dennegar gave consent to Knuston to be a legal representative to manage his finances
- Knutson had full access to his assets including: email, checks, and statements
- Dennegar trusted Knutson to pay bills and expenses
As for credit cards, Knutson took control of Dennegar’s finances to help make payments. The credit issuer provided adequate notice to the cardholder, which mentions a potential liability when the user makes a purchase. In this case, there is more than one situation in which Knutson used the credit card to complete an unauthorized transaction.
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Agency Law
- Definition: Relationship between principal and agent
- Dennegar was principal, and knutson was the agent
- Dennegar gave Knutson full access to his finances
The relationship between principal and agent focuses on efficient methods to conduct business on behalf of the two parties given assumptions, organizations, and information. (Eisenhardt, 1989) As mentioned, Knutson had no income or funds to pay the mortgage, which is where he would be rewarded by helping out Dennegar.
Transacting on behalf of Dennegar would lead to being liable for the charges on the credit card. The agent's obligations to the principal entail that they must perform duties, and in this case, it connects back to the authorization to write checks to pay bills. (Schuler, 2002) Under the agency theory, Dennegar could be held liable because Knutson was hired as the agent to make any decisions that may assist the principal.
Transacting on behalf of Dennegar would lead to being liable for the charges on the credit card. The agent's obligations to the principal entail that they must perform duties, and in this case, it connects back to the authorization to write checks to pay bills. (Schuler, 2002) Under the agency theory, Dennegar could be held liable because Knutson was hired as the agent to make any decisions that may assist the principal.
Contract Liability
- Between two parties, there was a an offer which brought acceptance and consideration
- Dennegar gave access to knutson to make all finance decisions which holds an agreement that Knutson can transact
- Contract was binding
Contract liability is a legally binding agreement establishing a relationship between two or more parties.
Dennegar has given total obligations and finance control over Knutson in this case. If Knutson transacts on Dennegar's behalf, he will be held liable for all payments from the credit card.
Dennegar has given total obligations and finance control over Knutson in this case. If Knutson transacts on Dennegar's behalf, he will be held liable for all payments from the credit card.
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Summary
- Dennegar should be held responsible for the total credit card balance that Knutson conducted
- Relationship between Dennegar and Knutson
- Binding contract that holds Dennegar responsible
To sum up, Dennegar should be held liable for all financial debt that Knutson conducted under his name.
The relationship was under agency law that connected the principal and agent into an agreement.
The contract was established orally, which holds Dennegar liable for Knutson's action.
The relationship was under agency law that connected the principal and agent into an agreement.
The contract was established orally, which holds Dennegar liable for Knutson's action.
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References
- Eisenhardt, K. M. (1989, January). Agency theory: An assessment and review - JSTOR. Agency Theory: An Assessment and Review. Retrieved September 26, 2022, from https://www.jstor.org/stable/258191
- Kowala, R. (2021). EBSCO Information Services. Using stewardship and agency theory to explore key performance indicators of family businesses. Retrieved September 26, 2022, from https://eds.p.ebscohost.com/eds/pdfviewer/pdfviewer?vid=2
- Santoso, B. (2022). EBSCO Information Services. The Determinant of Sukuk Rating: Agency Theory and Asymmetry Theory Perspectives. Retrieved September 26, 2022, from https://eds.p.ebscohost.com/eds/pdfviewer/pdfviewer?vid=2
- Schuler, D. (2002). Principal-Agent Relationship. Principal-agent relationship. Retrieved September 26, 2022, from http://www.ruf.rice.edu/~schuler/principal-agent.html
