Agency Flashcards
Agency Formation
- Agreement
- To Benefit Principal
- Under Control of Agent
- Capacity of Principal
- Satisfies SoF (if necessary)
- NOTE: Can also be formed by operation of law
Principal Duties
not a fiduciary of agent
- Duty to Compensate or Reimburse
- Duty to Cooperate
- Duty Under Contract
Agent Duties
- **Fiduciary Duty of Care **= reasonable care under circumstances / BJR
- Fiduciary Duty of Loyalty = undivided loyalty to principal
- Duty of Obediance
- Duty to Communicate
- Express Contract Duties
Principal Liability for Agent Contracts if:
Agent has:
1. Actual Express Authority
2. Actual Implied Authority
3. Apparent Authority
4. Ratification of Principal
EFFECT: Principal liable and agent is not liable
Actual Express Authority
Authority (1) contained within the four corners of the agreement and (2) expressly granted by principal
Actual Implied Authority
Authority Agent believes she has from Agent’s reasonable interpretion of principal’s actions
Termination of Actual Authority where:
GENERAL RULE: Termination of actual authority occurs by either party’s unilateral termination based on:
- Breach of Agent’s Duty
- Lapse of Stated or Reasonable Time
- Operatoin of Law
- Changed Circumstance
- Happening of a Specified Event
- Unilateral Termiantion by Either Party
- Death of Principal (only if agent has notice)
BLOCHUD
Apparent Authority
Definition: Where principal holds the agent out as possessing certain authority, thereby inducing reasoanble reliance by other on that authority
Lingering Authority based on Apparent Authority: Where authority has been terminated, agent will still have apparent authority to acton the principal’s behalf as to all third parties with whom the principal knows the agent dealt unless the third parties receive actual or constructive notice of termination
Failure to take back Written Authority: Where actual authority has been terminated, principal must take back all written certifications of agency to avoid apparent authority
Ratification
Definition: Agent takes action w/o authority but principal subsequently validates the act and becomes bound.
Requirements: Principal must have:
1. Capacity
2. Knowledge of all material facts
3. Acceptance of transaction
When Agent is in Breach, Principal can:
- Discharge the agent
- Withhhold Compensation
- Seek an accounting or contract remedy
- Seek tort damages
- Seek indemnification
When Principal is in Breach, Agent may:
- Terminate Relationship
- Seek Contract Damages
- Seek a possessory lien
Agent Liability for Contract where:
- Agent is acting with no authority
- Agent does not identify the principal
- Principal’s existence is undisclosed; or
- Where Express Agreement
Principal is Liable for Agent’s Tort where:
Committed within the scope of agency if act was:
1. Kind the agent was hired to perform
2. On the job; or
3. Agent intended action to benefit P
Principal Liable for Independent Contractor (P does not have power to control method) if:
- Ultrahazardous activity
- Nondelegable duties
- Negligent Hiring
- Estoppel
Principal Liability for Intentional Torts of Agent
NO UNLESS:
1. Specially authorized
2. Natural result from nature of employment; or
3. Motivated by desire to serve principal
