agency Flashcards
capacity- principal
principal must have capacity to contract.
Minor cannot appoint an agent.
capacity- agent
- agent needs only minimal capacity- i.e. only mental capacity. does not need contract capacity
- agent CAN be a minor
writing requirement
if the contract A is to enter into with TP requires a writing, the agency agreement also requires a writing
(ex: length of time of TP contract, land sale)
agency
fiduciary relationship which results when
One person (principal) appoints
Another person (agent)
To act on the principals behalf, subject to principal’s control,
And agent consents
control required for agency
P just must have specified task
more control is indicative of employment, less independent contractor
need not prescribe details
proving consent
consent may be by express agreement, or inferred from conduct
irrevocable agency relationship
if coupled with an interest or power given as security
lingering apparent authority
where the agent’s actual authority has been terminated, he will have apparent authority to act on P’s behalf as to all 3rd parties w/ whom P knows he dealt unless and until 3rd parties get ntc
when A’s manifestations can create apparent authority (rare)
- when the principal negigently allows impostor to take action appearing to have authority, P liable.
- also if P was present and would have denied A’s statement - silence will be considered holding out
agent fiduciary duties
1 duty of care- reasonable care depending on circumstances like whether agent is paid and what they’re doing
2 duty of loyalty- act solely for the principal benefit. Look to see if agent is taking benefit away from the principal
3 duty of obedience to reasonable directions- obey directions that don’t harm p and are not illegal
if a subagent that the agent hires breaches a duty, who is liable?
the agent
partially disclosed principal and who is liable in that situation
third party knows the principal exists but not his identity
No effect on principal liability- still liable
Agent is now liable when otherwise he would not be if tp knew of principal
Majority of states allow both to be sued but normally if either the principal or agent object, the third party must choose before judgment who to obtain judgment from
undisclosed principal
neither identity nor existence disclosed
The principal is still liable and so is the agent
scope of employment
Ask if the agent conduct is
- similar or incidental to what agent authorized to do
- within time and place of authorized employment (small deviation w/in scope but major is not)
- done at least in part to serve employer?*
*will serve employer if it at least partly serves an employer’s substantial purpose
liability for I/C
-if inherently dangerous activities involved
-nondelegable duties delegated
-principal knowingly selected incompetent independent contractor
if only negligent- principal only liable for own neg
Is a writing required for an agency relationship ?
Only if the agency is for more than a year or otherwise falls within the statute of frauds (real estate agent for example)
Principal duty to agent
No fiduciary duty!
Pay reasonable compensation for services
Reimburse for expenses incurred by agent
Indemnify agent for losses suffered in performing duties
Actual authority- types
Authority that agent reasonably believes they have based on communications or acts of the principal
Principal will be bound to a contract agent made if there is either:
a) Express authority from principal- explicitly stated in written agreement or orally
b) implied authority based on principal’s words or conduct that would lead a reasonable person to think they have authority to do something
And the authority has not been terminated
Termination of actual authority
Happening of a stated event
Death or loss of capacity of principal and agent has notice
Change in business conditions, destruction of subject matter
Passage of reas amount of time if not stated
Express termination by either party
Breach of fiduciary duty by agent
Death of the agent
Irrevocable agency
1) a. agent receives an interest in the subject matter of the agency
b. power to act as an agent given as security
2) supported by consideration (for Restatement approach)
Can’t be revoked by either p or a or by operation of law
Apparent authority
When the principals words or conduct make a third party reasonably believe the agent has authority even if the agent does not actually have authority
Prior dealings- third party and agent entered into a contract like this before, principal knows the third party knows, and principal did not object
Title - tasks someone with that title can normally do are apparently authorized (ex: treasurers can typically write checks)
False Statements by the agent that agent had authority, that principal was aware of, principal was silent (negligently allowing an imposter to hold themselves out as agent)
Lingering apparent authority
Ratification
Transaction by an agent without actual authority that is later affirmed by the principal by either implication, like accepting benefits or staying silent when there is a duty to disaffirm, or express statement (verbal agreement to the terms, or corporate resolution).
Principal must have knowledge of all material facts of the contract
Principal must accept entire contract - all material terms
Principal must have capacity at time of ratification
Disclosed principal and effect
Agent explicitly says he is acting for x person
The principal is the only person bound on the contract
Employee or independent contractor and effect on liability of principal
If an employee (principal has a lot of control over the manner and method in performing the task), the principal is liable for torts committed in scope of employment or during a minor deviation from scope of employment (instructions)
If the agent is an independent contractor then the principal is usually not liable
