Agency

Question 1

Three Agency Problems

Answer 1

1. Liability of P to 3d Parties for Torts of A
2. Liability of P to 3d parties for Kx entered into by A
3. Duties owed by A to P

Question 2

Will a P be vicariously liable for torts of an A?

Answer 2

Principal will be liable if:

1. A principal-agent relationship exists
2. The tort was committed by the A within the scope of that relationship

Question 3

Principal-Agent Relationship Requirements

Answer 3

Assent
Benefit
Control

Question 4

Assent

Answer 4

Informal Agreement between P and A

Question 5

Benefit

Answer 5

Agent’s conduct is for the Principal’s benefit

Question 6

Control

Answer 6

Principal has the right to control; by supervising the manner of performance

Question 7

Will P be liable for sub-agents tort?

Answer 7

Only if assent, control, and benefit

Question 8

Will P be liable for borrowed agents torts?

Answer 8

Must have assent, benefit, and control. Likely missing right to control

Question 9

Agents v. Independent Contractors

Answer 9

No right to control independent contractor and no power to supervise its performance

Question 10

When will a P be liable for independent contractor?

Answer 10

Inherently dangerous activity OR estoppel- held out with appearance of agency

Question 11

Scope of P-A Relationship

Answer 11

Was conduct of the kind agent hired to perform?
Did the tort occur on the job?
Did the agent intend to benefit the principal?

Question 12

Frolic v Detour

Answer 12

Frolic- new and independent journey

Detour- mere departure from task

Question 13

Principal’s vicarious liability for intentional torts

Answer 13

Generally, not liable as they are outside of the scope. EXCEPT: specifically authorized, or natural from nature of the job, OR motivated to serve the principal

Question 14

Liability of P for Contracts Entered into by A

Answer 14

Only liable if P authorized A to enter the contract

Question 15

Four types of Authority

Answer 15

Actual Express Authority
Actual Implied Authority
Apparent Authority
Ratification

Question 16

Actual Express Authority

Answer 16

Narrowly Construed
Can be oral or private
Follow the Equal Dignity Rule- if contract must be in writing, so must authority
Revoked by: unilateral act of either P or A or Death/Incapacity of P- unless durable power given which survives

Question 17

Actual Implied Authority

Answer 17

Authority which P gives A through conduct or circumstance
Necessity- authority to do all tasks necessary to accomplish express task
Custom- authority to do tasks customarily performed by one w same title
Prior Acquiescence- authority to do tasks authorized from previous relationship

Question 18

Apparent Authority

Answer 18

Two Part Test
P cloaked A with appearance of authority AND
3d party reasonably relies on appearance of authority

Question 19

Ratification

Answer 19

Authority can be granted after the Kx entered if:

1. P has knowledge of all material facts AND
2. P accepts its benefits

Ratification cannot alter the terms of the Kx

Question 20

Rules of Liability on the Contract

Answer 20

Generally, the P is liable on its authorized contracts and an authorized agent is not liable.
Exception: Undisclosed P- If P is partially disclosed (only P identity concealed) or Undisclosed (fact of P concealed) the agent may be liable at the election of 3d Party

Question 21

Duties A owes to P

Answer 21

Duty of reasonable care
Duty to obey
Duty of loyalty- self dealing, usurpation, secret profits

Question 22

Principal’s Remedy for Breach of A Duties

Answer 22

P may recover the losses caused by breach and disgorge profits made by breaching A