Agency

Question 1

Requirements to form an agency

Answer 1

capacity, consent, formation by action or operation of law

Question 2

agent’s duties

Answer 2

loyalty
obedience
care
contract

Question 3

principals duties

Answer 3

compensate and reimburse
cooperate
contract

Question 4

Remedies by principal

Answer 4

breach of contract
negligence
failure to perform
breach of fiduciary duty
accounting actions
withhold unpaid compensation for breach or tortious conduct
terminate releationship

Question 5

remedies of agent

Answer 5

breach of contract
lean on property for unpaid compensation

Question 6

When is a principal bound by a contract entered into by the agent

Answer 6

when the agent acts with authority

Question 7

kinds of authority

Answer 7

actual express authority
actual implied authority
apparent authority
ratification

Question 8

actual express authority

Answer 8

The authority that a principal expressly gives an
agent.

Question 9

actual implied authority

Answer 9

The authority that the agent reasonably believes
she has as a result of the actions of the principal.

For example, if given the express authority to manage an apartment building, there might be implied authority to hire a janitor

Question 10

apparent authority

Answer 10

Even if the agent lacked actual authority at the time of the
contract, the principal will be bound on the contract if
(1) the principal held out the agent as having authority, and
(2) based on the holding out, the third party reasonably believed that the agent had authority to act.

Question 11

ratifiacation

Answer 11

A principal can be bound by a contract if the principal later
ratifies the transaction.

Question 12

methods of ratifiacation

Answer 12

acceptance of the transaction’s benefits,
silence if there is a duty to affirm,
suing on the transaction

Question 13

when is a principal liable to a third party?

Answer 13

if the agent had authority, the
principal is liable to the third party

Question 14

when is an agent liable to a third party?

Answer 14

1) Disclosed principal—Agent generally not liable.
2) Unidentified or undisclosed principal—Generally either the principal or agent can be held liable

Question 15

Can an undisclosed principal sue a third party?

Answer 15

Yes, the principal is unidentified or undisclosed, either the principal or the agent may hold the third party liable.

Question 16

when can an agent sue a third party?

Answer 16

when the principal is undisclosed or unidentified

Question 17

may an agent sue a third party (or enforce a contract) if the principal is disclosed

Answer 17

no. the principle may enforce the contract or hold the 3rd party liable

Question 18

When will a principal be vicariously liable for the acts if an independent contractor?

Answer 18

(1) inherently dangerous activities are involved;
(2) nondelegable duties have
been delegated; or
(3) the principal knowingly selected an incompetent independent contractor

Question 19

is an employee an agent to their employer?

Answer 19

yes

Question 20

when will conduct be considered within the scope of employment?

Answer 20

Court will consider
- the nature of the work
- whether the conduct was substantially removed from the
authorized time and space limits of the employment (frolic vs. detour), and whether the conduct was actuated, at least in part, by a purpose to serve the
employer.

Question 21

A principal is liable where an agent appears to deal or
communicate on behalf of the principal and the agent’s apparent authority enables
the agent to

Answer 21

(1) commit a tort or
(2) conceal its commission

Question 22

capacity required for the principal

Answer 22

contractual capacity

Question 23

capacity required for the agent

Answer 23

only minimal capacity

Question 24

formation by action

Answer 24

The principal and agent can agree to the agency relationship
(actual authority);
the principal can hold another out as his agent
(apparent authority);
or the principal may agree to be bound by previously unauthorized acts (ratification).

Question 25

formation by operation of law

Answer 25

A principal may be estopped from denying the existence of an agency relationship, or an agency may be created by statute.

Question 26

How do you tell whether an individual is an employee or an independent contractor?

Answer 26

most important factor is whether the principal had the right to control the manner and method of the agent’s work.