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Agency Flashcards

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1
Q

Who is an agent?

A

An agent does things on behalf of the principal

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2
Q

Who is a principal?

A

Directs the agent’s acts

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3
Q

When might a principal be liable to an agent?

A

In K and tort

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4
Q

Three components of agency relationship

A

ABC
Assent - requires that both parties manifest assent to work with one another
Benefit - the agent agrees to work for the principal’s benefit
Control - the agent agrees to work subject to the control of the principal

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5
Q

What will courts look to if one or more parties disclaim the creation of an agency relationship?

A

Manifestations of assent which can range from a formal letter, to spoken words, to physical actions

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6
Q

Who can be a principal?

A

Any person or entity that has legal capacity (excludes minors and anyone incapacitated by illness or intoxication)

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7
Q

What types of entities can be principals?

A
  • Employer
  • Corporation
  • Partnership
  • Not unincorporated associations bc they lack legal capacity
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8
Q

How to tell if someone is an employer

A

Significant amount of control over day to day activities of the employees including:

  • Giving employees tools at the workplace
  • Paying employees on a structured pay period; and
  • Directing the ways in which employees should finish and perform the tasks
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9
Q

Who can be an agent?

A

Any person or entity who has minimal capacity, including minors

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10
Q

What is minimal capacity?

A

Must be able to:

  • Assent to the agency relationship
  • Perform tasks on behalf of the principal; and
  • Be subject to the principal’s control
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11
Q

What are the formalities for creating an agency relationship?

A

(i) Assent, (ii) benefit, and (iii) control, No consideration required and no consideration in writing necessary.

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12
Q

Types of agents

A

Servants/employees and indept Kers

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13
Q

Servant/employee

A

Employer has the right to control the agent’s physical conduct of work

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14
Q

Independent contractors

A

Principal does not have the right to control the agent’s physical conduct of work. Characteristics:

  • Maintain a high level of independence
  • Free to work for other people
  • Paid on a fixed fee
  • Typically owns his own tools
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15
Q

Who can terminate an agency relationship?

A

Either party can terminate unilaterally

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16
Q

When is a principal liable for Ks that an agent enters on behalf of the principal?

A

Bound on a K when:

  • The principal has authorized the agent to enter the K; and
  • The agent acted with legal authority
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17
Q

Four types of legal authority

A
  • Actual express authority
  • Actual implied authority
  • Apparent authority
  • Ratification
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18
Q

Actual v apparent authority

A

When you are trying to discern between actual authority and apparent authority, look to the communication. When the principal is communicating with the agent, there is actual authority; when the principal is communicating with the third party, there is apparent authority.

19
Q

How is actual express authority created?

A

The principal creates actual express authority by using words written or spoken to convey authority to the agent

20
Q

Actual express authority: requisite intent

A

Subjective intent: the agent must believe that he is doing what the principal wants him to do
Objective intent: The belief must be objectively reasonable

21
Q

Termination of authority by death

A

Upon the death of the principal, actual express authority terminates when the agent has actual knowledge of the principal’s death. Actual express authority terminates immediately upon the death of the agent.

22
Q

How is actual implied authority created?

A

Principal creates actual implied authority by using words, written or spoken, or other conduct to convey authority to the agent to take whatever steps are necessary to achieve the principal’s objectives

23
Q

What are the limits to agent’s actions under actual implied authority?

A

The agent has actual implied authority (absent express instructions to the contrary) to act within the accepted business custom or general trade usage

24
Q

Communication to look to for the different types of legal authority

A

Actual express authority - comm between agent and principal

Actual implied - comm between principal and agent

Apparent authority - comm between principle and the third party

Ratification - no pre-act comm to consider

25
Q

How is apparent authority created?

A

The principal creates apparent authority by words, written or spoken, that cause the third party to reasonably believe that the principal consents to have acts done on the principal’s behalf by the agent. Questions to ask: Is the 3d party’s belief reasonable? Have the principal and the 3d party had similar dealings before?

26
Q

What is required for ratification?

A

(i) the principal must ratify the entire contract;
(ii) the principal and the third party must have legal capacity to enter into the contract;
(iii) the ratification must occur before the third party withdraws from the contract; and
(iv) the principal must know the material facts of the transaction.

27
Q

What are the different types of principals?

A
  1. Disclosed
  2. Partially disclosed
  3. Undisclosed
28
Q

Why do the different types of principles matter?

A

In K dispute, determines who is liable.

29
Q

Disclosed principal

A

The third party knows: (i) the agent is acting on behalf of a principal and (ii) the principal’s identity. The parties to the K are the 3d party and the principal

30
Q

Partially disclosed principal

A

3d party knows that the agent is working on behalf of a principal, but not the identity of the principal. Parties to the K are the 3d party, principal, and agent.

31
Q

Undisclosed principal

A

3d party knows neither the agent’s status as an agent nor the principal’s identity. Parties to the K are the 3d party and the agent. Whether the undisclosed principal is also a party depends on whether the agent had the authority to bind the principal to the K.

32
Q

What is vicarious liability?

A

A principal may be liable for the tortious acts of his agent

33
Q

Requirements for vicarious liability

A
  1. Principal has sufficient control over the agent’s conduct such that the agency relationship is employer-employee; and
  2. The tort committed by the agent was committed while the agent was acting within the scope of his employment
34
Q

What is sufficient control for vicarious liability?

A

A principal who controls, or has the right to control the physical conduct (manner and means) of the agent’s performance of work is in the higher category of employer-employee status.

35
Q

Does the principal have vicarious liability for torts committed by independent Kers?

A

No

36
Q

Exceptions to liability bar to contractor torts

A
  • Task is inherently dangerous
  • Principal was negligent in hiring the indept Ker
  • Principal retains control over certain tasks and the tort occurs within those tasks
37
Q

How to determine scope of employment - COB

A
  • was the agent’s Conduct of the kind that the agent was hired to perform?
  • did the tort occur “On the job”?
  • did the agent intend to Benefit the principal?
38
Q

What is frolic?

A

A significant deviation from an assigned path outside scope of employment

39
Q

What is detour?

A

A de minimis deviation from an assigned path; within scope of employment

40
Q

Can an employer be held vicariously liable for intentional torts?

A

Generally, no because intentional torts are outside the scope of employment. But exceptions:

  • Conduct occurred within the general space and time limits of employment
  • The agent was motivated in some part to benefit the principal
  • The act is of a kind that the agent was hired to perform
41
Q

Three duties that all agents owe to principals - even if the agent is unpaid:

A
  1. Duty to exercise reasonable care
  2. Duty to obey reasonable instructions
  3. Duty of loyalty
42
Q

What is encompassed in an agent’s duty of loyalty?

A
  • Can’t usurp a business opportunity
  • Can’t take in secret profits
  • Can’t compete in competing businesses with the principal
43
Q

What is vicarious liability?

A

Vicarious liability is a form of strict liability in which one person is liable for the tortious actions of another.

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