Agency Flashcards
Agency
The fiduciary relationship that arises when one person (the principal) manifests assent to another person (the agent) that the agent shall act on the principal’s behalf and subject to the principal’s control, and the agent manifests assent or otherwise consents so to act
3 ways to create an agency
- Agreement
- Ratification
- Estoppel
Agency by ratification
If P decides to adopt a contract negotiated by an unauthorized person purporting to act as an agent, then P is bound, as is the TP
P ratifies an act thru:
(1) manifesting assent; or
(2) conduct that justifies a reasonable assumption that the person so consents
Ratification requires acceptance of the results of the act with an intent to ratify, and with full knowledge of all the material circumstances
§14(O)
A creditor who assumes control of his debtor’s business may become liable as principal for the acts of the debtor in connection with the business
Actual Express Authority
Authority that P intentionally confers on A
Actual Implied Authority
Authority to acts that are incidental to or reasonably necessary to carry out actual express authority
Apparent Authority
The authority that P allows a TP to believe A has
- only exists to the extent that it is reasonable for the TP dealing with the agent to believe that the agent is authorized. TP must also actually believe that the A is authorized
§6.10 Agent’s Implied Warranty of Authority
A person who purports to make a contract, representation, or conveyance to or with a TP on behalf of another person, lacking power to bind that person, gives an implied warranty of authority to the TP and is subject to liability for damages for loss caused by breach of that warranty, unless
(1) P ratifies the act
(2) A gives notice to the TP that no warranty of authority is given
(3) TP knows that A has no authority
Disclosed Principal
When an A & TP interact, the TP has notice that A is acting for P and has notice of P’s identity
When A makes a contract with TP:
- P & TP are parties to the k
- A is not a party, unless the A & TP agree otherwise
Undisclosed Principal
TP has no notice that A is acting for P
When A makes a contract with TP: (A can only contract if they have actual authority here)
- A & TP are parties to the K
- P is a party to the K
Unidentified Principal
TP has notice that A is acting for P, but does not have notice of P’s identity
When A makes a contract with TP:
- P & TP are parties to the K
- A is a party, unless A & TP agree otherwise
Agency by Estoppel
Agency by Estoppel is created when:
- P creates, thru intentional or negligent words, acts, or omissions, an appearance of authority in the purported agent; AND
- TP reasonably & in GF believes changes her position in reliance upon the appearance of authority
Termination of Actual Authority
Can terminate thru:
(1) An agreement between A & P; or the occurrence of circumstances on the basis of which the agent should reasonably conclude that the P no longer would assent to the agent’s taking action on P’s behalf
(2) a manifestation of revocation by the P to the A; or a renunciation by the A to the P
How to properly terminate all authority (AA)
P must give ACTUAL NOTICE to everyone who dealt with A as her agent & CONSTRUCTIVE NOTICE to the rest of the world
Servant
A servant is an agent performing services in the master’s affairs whose physical conduct is controlled or is subject to the right of control by the master
