(っ◔◡◔)っ ♥ Agency ♥

Question 1

Creating agency relationship

Answer 1

Principal and agent manifest assent to work with one another; agent agrees to work for principal’s benefit and subject to principal’s control.

No consideration required.

Question 2

Principal requirements

Answer 2

Requires legal capacity. Minors, persons incapacitated by illness or intoxication, and unincorporated associations lack legal capacity.

Question 3

Agent requirements

Answer 3

Minimal capacity, so long as person/entity can assent to agency relationship, perform tasks on behalf of the principal and subject to principal’s control.

Question 4

Independent contractor

Answer 4

One who, by virtue of his contract, possesses independence in the manner and method of work.

Usually paid by job instead of receiving ongoing salaries; principal does not supervise activities or retain a right to control his activities.

Question 5

Principal liability on K

Answer 5

When principal has authorized the agent to enter into a K and the agent acted with legal authority via:

actual authority [expressed or implied]

apparent authority

ratification

Question 6

Actual express authority

Answer 6

Created by written or spoken words with clear and specific terms and instruction.

Principal must have made a manifestation that causes the agent to reasonably believe that the agent is authorized to act on the principal’s behalf.

Question 7

Actual implied authority

Answer 7

Principal communicates to the agent by word [written or spoken] or other conduct to convey authority to the agent to take whatever steps are necessary to achieve the principal’s objectives.

Agent has actual implied authority [unless instructions to the contrary] to act within the accepted business custom or general usage.

Question 8

Apparent authority

Answer 8

Apparent authority exists when a third party reasonably relies on manifestations by the principal concerning the agent’s authority to act on the principal’s behalf.

Exists until principal notifies 3d party of revoked authority.

Question 9

Implied warrant of authority

Answer 9

An agent purporting to be acting for a principal gives an implied warrant of authority to a third party. A breach occurs and agent is liable to 3d party if the agent lacks the power to bind the principal.

Question 10

Ratification

Answer 10

Principal is bound as if it had authorized the agent, even if the agent acted without authority.

Requirements: (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.

Question 11

Principal identity and who is party to K

Answer 11

Disclosed principal—3d party and principal are parties to the K.

Partially disclosed: 3d party has notice of P’s existence but not identify → agent, 3d party, and principal are parties to the K, unless agent and 3d party agree otherwise

Undisclosed [3d party doesn’t know of agent’s status as agent and is unaware of P’s existence or identity] → agent and 3d party are parties to the K

• If A has authority, both P and A are parties
• Once 3d party discovers existence of undisclosed principal, 3d party may choose to hold either P or A liable

Question 12

Employer/Employee vicarious liability

Answer 12

A principal may be held liable for the tortious acts of his agent when (1) employer has the right to control the means and methods by which the other person performs his tasks; and (2) agent was acting within the scope of employment.

Question 13

Scope of employment

Answer 13

Includes acts the employee is employed to perform or that were intended to benefit the employer. Includes detours, or minor deviations, but not frolics [major deviation from assigned work duties].

Careful instructions do not protect employer from liability so long as employee acted within scope.

Question 14

Intentional torts and vicarious liability

Answer 14

Intentional torts generally fall outside scope of employment.

BUT liable if:

• conduct occurred within the general space and time limits of employment or
• agent was motivated in some part to benefit the principal and the act is the kind the agent was hired to do [e.g., personal security guard]

Question 15

Estoppel

Answer 15

Principal [or purported principal] may be estopped from denying the existence of an agency relationship where 3d party is justifiably induced to make a detrimental change in position because principal either:

(1) intentionally or carelessly caused the belief; or
(2) having notice of such belief and that the belief might cause others to change their position in reliance, failed to take reasonable steps to notify them of the facts