Agency

Question 1

When does an Agency Relationship exist?

Answer 1

If there is

1. Assent;
2. Benefit; AND
3. Control

Priority: HIGH

Question 2

What are the three types of Agency Relationships?

Answer 2

1. A universal agent (broad authority – ALL acts)
2. A general agent (a series of transactions)
3. A special agent (limited authority – specific act/transaction OR specified period of time)

Priority: Medium

Question 3

When does an Agency Relationship terminate?

when the agent no longer has authority to act

Answer 3

1. When the principal/agent manifests to the other that the relationship is terminated;
2. A specified term of the agent’s authority expired;
3. Upon the death of the principal or agent; OR
4. Upon the incapacity of the principal or agent.

Priority: Medium

Question 4

When does Express Actual Authority exist?

Answer 4

When the principal has explicitly told the agent that he is entitled to act.

Priority: HIGH

Question 5

When does Implied Actual Authority exist?

Answer 5

When either:

The agent believes he is entitled to act to carry out his express authorized duties;
The agent has acted similarly in prior dealings; OR
It is customary for agents in that position to act in that way.

Priority: HIGH

Question 6

When does Apparent Authority exist?

Answer 6

When:

A third-party reasonably believes that the person has authority to act on behalf of the principal;
AND
That belief is traceable to the principal’s manifestations.

Priority: HIGH

Question 7

How does a principal hold out an agent as having authority?

Answer 7

When he:

Gives the agent a position/title indicating such authority;
Has previously held the agent out as having authority and has not published a revocation; OR
Has cloaked the agent with the appearance of authority.

Priority: HIGH

Question 8

Apparent Authority is not applicable during what circumstances?

Answer 8

If the third-party has actual knowledge that the agent did NOT have authority;
The contract/transaction was not within the ordinary usages of business; OR
If there is an undisclosed principal

(May be applicable if principal is partially disclosed or unidentified.)

Priority: HIGH

Question 9

When does ratification of an agent’s contract occur?

Answer 9

When the principal:

Has knowledge of all material facts or contract terms;
AND
Thereafter manifests assent (approval) of the same through words or conduct.

Priority: Medium

Question 10

An agent has NO contractual liability to a third-party for contracts entered into with that party, if he does what?

Answer 10

Fully discloses the principal he is acting on behalf of; AND
Agent had (a) actual authority, or (b) apparent authority (even if no actual authority present).

*Agent WILL be liable if both elements above are not met.

Priority: HIGH

Question 11

Employee

vs.

Independent Contractor

Answer 11

Employee: Employer controls manner/means of the employee’s performance of work. Employer IS vicariously liable for negligent acts of employee (within scope or employment).

Independent Contractor: A person NOT controlled or subject to control with respect to performance (may or may not be an agent). Principal/employer is generally NOT liable for torts committed by a contractor.

Priority: HIGH

Question 12

What determines whether a person is an Independent Contractor or Employee?

Answer 12

Whether the principal had the right to control the manner and method in which the job is performed.

(If the principal had substantial control, it’s likely the person will be deemed an employee).

Priority: HIGH

Question 13

Under respondeat superior, an employer is vicariously liable for an employee’s negligent act if the employee was acting within the scope of employment.

When is an employee deemed to be acting within that scope?

Answer 13

When:

Performing work assigned by the employer; OR
Engaging in a course of conduct subject to the employer’s control.
** Conduct is not outside the scope merely because an employee disregards the employer’s instructions.

Priority: HIGH

Question 14

Vicarious Liability – Respondeat Superior

Acts Within Scope of Employment

vs.

Acts Outside Scope of Employment

Answer 14

Within Scope: When performing work assigned by the employer OR engaging in conduct subject to the employer’s control.

Outside Scope: Tort occurs within an independent course of conduct AND is not intended by the employee to serve any purpose of the employer.

Priority: HIGH

Question 15

What causes an employee’s intentional torts to be considered within the scope of employment?

Answer 15

The Act was:

specifically authorized by the employer;
driven by a desire to serve the employer; OR
the result of naturally occurring friction from the type of employment.

Priority: HIGH

Question 16

In what situations is a principal still liable despite the doctrine of respondeat superior being inapplicable?

Answer 16

When:

The principal intended the conduct or consequences;

The principal was negligent in selecting, training, retaining, supervising, or controlling the agent;

The conduct involved a non-delegable duty to an injured person with whom they had a special relationship; OR

The agent had apparent authority, the agent’s actions taken with apparent authority constitute the tort (or enable the agent to conceal it), and a third-party reasonably relied on that authority.

Priority: Medium

Question 17

When will a principal be liable for torts committed by an Independent Contractor?

Answer 17

If:

The contractor is engaged in an inherently hazardous activity;

The duty owed by the principal is non-delegable; OR

Through the doctrine of estoppel:

The principal holds the contractor out as his agent to a third-party, they reasonably relied on the agent’s skill, and the third-party suffered harm as a result.

Priority: HIGH

Question 18

What fiduciary duties does an agent owe to the principal?

Answer 18

The duty of care – to use reasonable care
The duty of loyalty – to act solely and loyally for the principal’s benefit
The duty of obedience – to obey all reasonable instructions

Priority: HIGH