Agency

Question 1

Agency

Answer 1

Relationship that arises when 1 person, P, manifests an intention that another person, A, shall act on his behalf

Question 2

Formation

Answer 2

Capacity
Consent
Control

Question 3

Writing

Answer 3

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

Question 4

Consent

Answer 4

Both P and A is nec to form

• express - written or oral stmt’s
• implication - pty’s conduct

Question 5

Control

Answer 5

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

Question 6

Capacity

Answer 6

P must have K’ual capacity

A need not

Question 7

Duties owed by A

Answer 7

A, even if unpaid, is a FD of P, and owes corresponding FD’s
Duty of care
Duty of loyalty
Duty of obedience

Question 8

Duty of care

Answer 8

A owes duty to carry out agency w/ reas care

- sliding scale depending on any special skills A may have

Question 9

Duty of loyalty

Answer 9

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

Question 10

Duty of obedience

Answer 10

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

Question 11

Duties owed by P

Answer 11

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

Question 12

K liability

Answer 12

Power to bind P to a K

1. actual auth granted by P to A
2. apparent auth arising from P’s holding out another as his A to 3rd pty’s
3. ratification of A’s act by P

Question 13

Actual express auth

Answer 13

Expressed by P in words, oral or written

Contained w/in 4 corners of agency agmt and those expressly granted by P

Question 14

Actual implied auth

Answer 14

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

Question 15

Apparent auth

Answer 15

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

Question 16

Ratification

Answer 16

A purports to act on behalf of P w/o any auth at all, but P subsequently validates the act and becomes bound

1. P must have knowledge of all material facts re the K
2. P must accept the benefits of the transaction, entirely, can’t ratify portion only
3. Can’t be used to alter rt’s of intervening pty’s

Question 17

Liability in K

Answer 17

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

Question 18

Termination of actual auth

Answer 18

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

Question 19

Termination of apparent auth

Answer 19

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

Question 20

Tort liability

Answer 20

Respondeat superior

Master/ER is liable for torts committed by servant/EE w/in scope of his employment

Question 21

Servant

Answer 21

Subject to another’s control as to the means used to achieve a particular result

Question 22

IC

Answer 22

Subject to another’s control as results only, but not over how to achieve those results

Question 23

Servant - IC factors

Answer 23

Skill req, tools and facilities, period of employment, basis of compensation, biz purpose, distinct biz

Question 24

Conduct w/in scope of employment

Answer 24

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?

Question 25

Detour

Answer 25

Minor deviation from ER’s directions is usually w/in the scope

Question 26

Frolic

Answer 26

Substantial deviation is usually outside the scope

Question 27

Intentional torts

Answer 27

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

Question 28

Borrowed servant

Answer 28

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

Question 29

Direct liability

Answer 29

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