Agency

Question 1

How do you create an agency relationship?

Answer 1

Assent, benefit, control.

Question 2

Who can be a principal?

Answer 2

Any person or entity that has legal capacity can be a principal. No minors, incapacitated (illness/intoxication), unincorporated ass’n (no legal capacity)

Question 3

Who can be an agent?

Answer 3

Minimal capacity, including minors. Need to be able to assent to the agency relationship, perform the tasks, and be subject to principal’s control

Question 4

When is principal liable for K entered into by agent?

Answer 4

When agent acts with legal authority: (1) AEA, (2) AIA, (3) AA, (4) ratification

Question 5

Actual express authority

Answer 5

Written or spoken words, clear direct and definite language, or specific terms or instructions. Principal makes manifestation that causes the agent to reasonably believe that the agent is authorized to act on principal’s behalf.

Question 6

Actual implied authority

Answer 6

P communicates to A by using written/spoken words or other conduct to convey authority to the agent to take whatever steps are necessary to achieve P objective. Scope: business custom or general usage

Question 7

Apparent authority

Answer 7

P, through spoken/written words causes a 3rd party to believe that the agent can act on behalf of the principal because the principal has consented to have acts done on their behalf. Termination: P notifies 3rd party of revocation

Question 8

Apparent authority in tort

Answer 8

P is liable for tort committed by agent with AA when the agent’s appearance of authority enables them to commit tort or conceal its commission

Question 9

Implied warranty of authority

Answer 9

Apparent authority comes with implied warranty of authority. If agent lacks power to bind principal –> breach –> agent liable to 3rd party

Question 10

Ratification

Answer 10

P affirms prior act that was done on their behalf, elements: (1) ratify whole K, (2) have legal capacity to ratify K, (3) ratify in timely manner, and (4) have knowledge of material facts involved

Question 11

Frolic v. detour

Answer 11

Frolic - major deviation, outside scope, can avoid liability. Detour - minor deviation, inside scope, probably liable.

Question 12

Estoppel

Answer 12

Estopped from denying existence of agency relationship if a 3rd party was justifiably induced to make a detrimental change in position because that party believed relationship existed, AND P either (1) intentionally or recklessly caused that belief OR (2) having notice, failed to take reasonable steps.

Question 13

Vicarious liability for agent/principal

Answer 13

The doctrine of vicarious liability asserts that a principal is liable for the acts of an agent, even though the principal is innocent of fault and not directly guilty of any tort or crime. Under the doctrine of respondeat superior, a principal may be vicariously liable for a tort committed by an agent acting within the scope of his employment.

Question 14

Analysis for P liability on contract when A has actual express authority

Answer 14

If outside scope of actual express –> do analysis of apparent authority. If act with apparent authority, EVEN IF EXCEED ACTUAL AUTHORITY, PRINCIPAL LIABLE AND AGENT NOT

Question 15

Partially disclosed principal

Answer 15

A principal is partially disclosed if the third party has notice of the principal’s existence but not the principal’s identity. Unless the agent and the third party agree otherwise, an agent who enters into a contract on behalf of a partially disclosed principal becomes a party to the contract.

Question 16

Vicarious liability rule statement

Answer 16

Vicarious liability asserts that a principal is liable for the acts of an agent, even though the principal is not directly responsible. A principal can be liable under the doctrine of respondeat superior when the agent commits a tort while acting within the scope of their employment. A principal can also be vicariously liable when an agent is acting with apparent authority and commits a tort and their appearance of authority allowed them to do so. The third party must believe that the agent was acting with actual authority and that belief must be reasonable and traceable to a manifestation made by the principal.