Agency Flashcards
Agency
Relationship that arises when 1 person, P, manifests an intention that another person, A, shall act on his behalf
Formation
Capacity
Consent
Control
Writing
Not req by agency law
Req by SOF
- equal dignities doctrine - agency agmt’s must be in writing when A is to enter into certain K’s w/in SOF
Consent
Both P and A is nec to form
- express - written or oral stmt’s
- implication - pty’s conduct
Control
A must act subject to P’s control, but degree of control doesn’t need to be significant
Requisite level may be found simply by fact that P has specified the task that A should perform, even if P hasn’t prescribed the details of how the task should be accomplished
Capacity
P must have K’ual capacity
A need not
Duties owed by A
A, even if unpaid, is a FD of P, and owes corresponding FD’s
Duty of care
Duty of loyalty
Duty of obedience
Duty of care
A owes duty to carry out agency w/ reas care
- sliding scale depending on any special skills A may have
Duty of loyalty
A owes duty of undivided loyalty to P, including
- A must acct to P for any profits made while carrying out P’s instructions
- A must act solely for P’s benefit and not to benefit himself or a 3rd pty
- A must refrain from dealing w/ P as an adverse pty or from acting on behalf of an adverse pty
- A may not compete w/ P concerning subject matter of the agency
- A may not use P’s prop (including confidential info) for A’s own purposes or a 3rd pty’s purposes
Duty of obedience
A must obey all reas directions of P
If A doesn’t have actual auth and enters into a K on behalf of P, then breach
Duties owed by P
Not FD in nature
- if A incurs expenses or suffers other losses in carrying out P’s instructions, P has a duty to indemnify A
- unless circumstances indicate otherwise, inferred that P agreed to compensate P for his services
K liability
Power to bind P to a K
- actual auth granted by P to A
- apparent auth arising from P’s holding out another as his A to 3rd pty’s
- ratification of A’s act by P
Actual express auth
Expressed by P in words, oral or written
Contained w/in 4 corners of agency agmt and those expressly granted by P
Actual implied auth
A reas believes he has auth as a result of P’s axn’s
Auth inferred from P’s words or conduct, from custom or from P’s acquiescence
Apparent auth
P’s words or conduct would lead a reas person in the 3rd pty’s position to believe that A has auth to act on P’s behalf
Title or position may establish
Can’t be created by mere rep’n’s of A or a 3rd pty
Ratification
A purports to act on behalf of P w/o any auth at all, but P subsequently validates the act and becomes bound
- P must have knowledge of all material facts re the K
- P must accept the benefits of the transaction, entirely, can’t ratify portion only
- Can’t be used to alter rt’s of intervening pty’s
Liability in K
If actual auth, apparent auth, or ratification is present, P is liable on the K and A isn’t
However, if P is undisclosed (at time of A’s transaction, 3rd pty has no notice that A is acting for a P) or partially disclosed (at the time of A’s transaction, 3rd pty has notice that A is acting for a P, but has no notice of P’s identity), A is also liable on the K - P is still liable
Termination of actual auth
When A knows or should have known of the termination
- after a specified time or event
- change of circumstances
- breach of FD by A
- unilateral act by either P or A
- death or incapacity of P or A
Termination of apparent auth
If P gives A a writing manifesting his auth to be shown to 3rd pty’s, A’s apparent auth won’t be terminated w/ respect to 3rd pty’s who see and rely on such writing after termination of her auth
Lingering apparent auth - P must tell all 3rd pty’s that A has no auth to bind P - very hard
Tort liability
Respondeat superior
Master/ER is liable for torts committed by servant/EE w/in scope of his employment
Servant
Subject to another’s control as to the means used to achieve a particular result
IC
Subject to another’s control as results only, but not over how to achieve those results
Servant - IC factors
Skill req, tools and facilities, period of employment, basis of compensation, biz purpose, distinct biz
Conduct w/in scope of employment
Was conduct of the kind that A was hired to perform?
Did tort occur on the job? - frolic, detour
Was conduct at least in part to benefit P?
Detour
Minor deviation from ER’s directions is usually w/in the scope
Frolic
Substantial deviation is usually outside the scope
Intentional torts
ER isn’t liable bc outside scope of employment
However, w/in scope if
- natural from nature of job
- motivated to serve ER or
- specifically authorized or ratified by ER
Borrowed servant
ER may lend services of an EE to another
Whichever P has primary rt of control over the borrowed EE will be liable for EE’s torts
Direct liability
Every person is liable for their own torts
ER is liable for his own neg if he fails to properly train or supervise EE’s or fails to check EE’s crim record or job history
