Agency Flashcards
Agency creation ∑3
(a) Assent–manifestation of assent by both parties to work together;
(b) Benefit–agent agrees to work for P’s benefit;
(c) Control–agent agrees to work subject to P’s control.
Consideration is not required
Principal
Any person/entity with legal capacity © unincorporated assc
Agent
Any person/entity with minimal capacity to assent, perform tasks for P’s benefit and be subject to P’s control
Termination of agency relationship:
unilateral by either party
Principal liability under a contract by agent
P is liable for K that A entered on P’s behalf when A has the power to bind P or P ratifies the K.
Agent has power to bind principal when
A has actual authority, apparent authority, or P is estopped
Actual express authority: creation
created when P uses words to convey authority to A.
Intent: A must honestly and reasonably believe that he’s doing what P wants.
Actual express authority: termination
P’s death—when A has actual knowledge;
A’s death—immediate
Actual implied authority: creation
created when P causes A’s reasonable belief that A had authority
Actual implied authority: scope
Absent express instructions, A can act within the accepted business custom or trade usage
Apparent authority: creation
created when P’s manifestations cause 3rd party’s reasonable belief that A has the authority.
(If no manifestations, no apparent authority! Failure to act doesn’t count!)
Apparent authority for partially disclosed P
Partially disclosed P: P liable if 3rd party knows A is acting on P’s behalf
Apparent authority for undisclosed P
No apparent authority if 3rd party doesn’t know (a) agency status and (b) P identity
Apparent authority: termination
P tells 3rd party authority is revoked.
Authority by estoppel
P can’t deny authority if
(a) 3rd party reasonably believed K was for P and
(b) P caused the belief or failed to take reasonable steps to notify 3rd party of lack of authority
Estoppel of undisclosed principal
(a) A induced 3rd party to change position; and
(b) P knew A conduct might induce 3rd parties and failed to notify.
Estoppel of undisclosed principal: limiting instructions
Undisclosed P cannot rely on limiting instructions if it gives less authority than what a 3rd party would reasonably believe A to have if P had been disclosed.
Principal liability upon ratification
Even if A had no power to bind, P is bound if P expressly or impliedly affirms K
Principal’s ratification elements
Ratification requires
(a) P and 3rd p had legal capacity to contract;
(b) P has knowledge of the material terms of K
(c) P ratifies entire K (accepted K benefits);
(d) P ratifies before 3rd party withdraws from K
Respondeat superior
P is liable for A’s tortious acts if ∑
(a) P had sufficient control over A (e.g. employer-employee) and
(b) A was acting within the scope of employment.
Principal has sufficient control over agent when
P has right to control the manner and means of the work–when A is an employee.
Independent contractor: P does not control or have the right to control the manner and means of the work
Independent contractor—factors to analyze
High level of independence, free to work for others, fixed fee, own tools
P does not control or have the right to control the manner and means of the work
Principal liability for torts by independent contractor
P is not liable for torts by IC unless
(1) inherently dangerous task;
(2) P was negligent in hiring IC; or
(3) P retained control over certain tasks and tort occurs within those tasks
Scope of employment—factors to analyze
(1) A intended to benefit P;
(2) A was hired to perform the conduct;
(3) Tort occurred “on the job” (frolic or detour).
