Agency Flashcards
Requirements to form an agency
capacity, consent, formation by action or operation of law
agent’s duties
loyalty
obedience
care
contract
principals duties
compensate and reimburse
cooperate
contract
Remedies by principal
breach of contract
negligence
failure to perform
breach of fiduciary duty
accounting actions
withhold unpaid compensation for breach or tortious conduct
terminate releationship
remedies of agent
breach of contract
lean on property for unpaid compensation
When is a principal bound by a contract entered into by the agent
when the agent acts with authority
kinds of authority
actual express authority
actual implied authority
apparent authority
ratification
actual express authority
The authority that a principal expressly gives an
agent.
actual implied authority
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
apparent authority
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.
ratifiacation
A principal can be bound by a contract if the principal later
ratifies the transaction.
methods of ratifiacation
acceptance of the transaction’s benefits,
silence if there is a duty to affirm,
suing on the transaction
when is a principal liable to a third party?
if the agent had authority, the
principal is liable to the third party
when is an agent liable to a third party?
1) Disclosed principal—Agent generally not liable.
2) Unidentified or undisclosed principal—Generally either the principal or agent can be held liable
Can an undisclosed principal sue a third party?
Yes, the principal is unidentified or undisclosed, either the principal or the agent may hold the third party liable.
when can an agent sue a third party?
when the principal is undisclosed or unidentified
may an agent sue a third party (or enforce a contract) if the principal is disclosed
no. the principle may enforce the contract or hold the 3rd party liable
When will a principal be vicariously liable for the acts if an independent contractor?
(1) inherently dangerous activities are involved;
(2) nondelegable duties have
been delegated; or
(3) the principal knowingly selected an incompetent independent contractor
is an employee an agent to their employer?
yes
when will conduct be considered within the scope of employment?
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.
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
(1) commit a tort or
(2) conceal its commission
capacity required for the principal
contractual capacity
capacity required for the agent
only minimal capacity
formation by action
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).
