Agency Flashcards
When does an Agency Relationship exist?
If there is:
1) Assent;
2) Benefit; AND
3) Control.
Priority: HIGH
What are the three types of Agency Relationships?
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: Low
When does an Agency Relationship terminate?
(when the agent no longer has authority to act)
a) When the principal/agent manifests to the other that
the relationship is terminated;
b) A specified term of the agent’s authority expired;
c) Upon the death of the principal or agent; OR
d) Upon the incapacity of the principal or agent.
Priority: Medium
When does Express Actual Authority exist?
When the principal has explicitly told the agent that he is
entitled to act.
Priority: HIGH
When does Implied Actual Authority exist?
When either:
a) The agent believes he is entitled to act to carry out
his express authorized duties;
b) The agent has acted similarly in prior dealings; OR
c) It is customary for agents in that position to act in
that way.
Priority: HIGH
When does Apparent Authority exist?
When:
1) A third-party reasonably believes that the person has
authority to act on behalf of the principal;
AND
2) That belief is traceable to the principal’s manifestations.
Priority: HIGH
How does a principal hold out an agent as having authority?
When he:
a) Gives the agent a position/title indicating such authority;
b) Has previously held the agent out as having authority and
has not published a revocation; OR
c) Has cloaked the agent with the appearance of authority.
Priority: HIGH
Apparent Authority is not applicable during what circumstances?
a) If the third-party has actual knowledge that the agent did
NOT have authority;
b) The contract/transaction was not within the ordinary
usages of business; OR
c) If there is an undisclosed principal
(May be applicable if principal is partially disclosed or unidentified.)
Priority: HIGH
When does ratification of an agent’s contract occur?
When the principal:
1) Has knowledge of all material facts or contract terms;
AND
2) Thereafter manifests assent (approval) of the same
through words or conduct.
Priority: Medium
An agent has NO contractual liability to a third-party for contracts entered into with that party, if he does what?
1) Fully discloses the principal he is acting on behalf of;
AND
2) Agent had actual or apparent authority (even if no actual
authority present).
*Agent WILL be liable if both elements above are not met.
Priority: HIGH
Employee
vs.
Independent Contractor
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
What determines whether a person is an
Independent Contractor or Employee?
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
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?
When:
a) Performing work assigned by the employer; OR
b) 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
Vicarious Liability – Respondeat Superior
Acts Within Scope of Employment
vs.
Acts Outside Scope of Employment
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
What causes an employee’s intentional torts to be
considered within the scope of employment?
The Act was:
a) specifically authorized by the employer;
b) driven by a desire to serve the employer; OR
c) the result of naturally occurring friction from the type of
employment.
Priority: HIGH
