Agency Flashcards
Who is not an agent?
An independent contractor is not generally an agent. A key factor in determining whether a worker is an IC or employee is the level of control the principal exercises over the worker.
Is a principal liable for torts committed by an independent contractor?
Generally not – unless the duty is non delegable or if estoppel is present. (= principal holds out a contractor as an agent and there is reliance by a third party, the principal must be held liable for the contractor’s actions).
Agency Relationship
Created when a (i) principal manifests assent to an agent (ii) the agent acts on the principal’s behalf (iii) the agents actions are subject to the principal’s control (iv) the agent manifests assent or otherwise consents.
The principal is responsible for the acts of his agent.
Contractual Liability on the principal
A principal is subject to contractual liability on a contract that the agent enters into on the P’s behalf if the agent has the power to bind the principal to the contract.
An agent has the power to bind the principal to a contract when (i) the agent has actual authority (ii) the agent has apparent authority or (iii) the principal is estopped from denying the agent’s authority.
In addition, even if an agent acts with no power to bind the principal, the principal can become subject to liability on the contract if the principal ratifies the contract.
Formation by estoppel
An agency may be created through estoppel which requires a TP reliance on P’s communication
How do you determine whether P is bound by the contract entered in by A?
To determine if P is bound by the contract entered into by A, A must have had the authority to enter into the contract.
Actual Express Authority
Authority through express manifestations to A contained within 4 corners of agreement.
Actual Implied Authority
Authority that A reasonably believes that A has a result of P’s actions.
Apparent Authority
Arises from the manifestations of A’s authority due to P holding out as such via P’s words, actions or failure to act, thereby inducing 3P to rely on that authority.
Ratification (+ requirements)
If an “agent” acts for P w/o authority but P subsequently validates that act, P is bound.
P must
(i) reason to know all the material facts
(ii) accept the transaction
(iii) have capacity
Principal Tort Liability
An agent is liable for her own torts. There are also two ways for the principal to be liable:
Vicarious Liability (respondeat superior)
The P is liable in tort if the agent or employee:
- was acting within the scope of employment or
- made a minor deviation from employment or
- committed an intentional tort only if it was for the P’s benefit, because the P authorized it or it arose naturally from the employment.
Nb: intentional torts are not within the scope of employment, unless its a natural part of the employment
P direct liability
The principal is directly liable for its own negligence if it negligently failed to hire, fire or supervise an agent.
Liability of agent on contracts
If the principal is disclosed: the agent is not liable to the third party if the agent had authority to enter into the contract.
Otherwise, if the principal is undisclosed or partially disclose, the agent may be liable to the TP at the TP’s election
Duties owed by the agent
The agent has a duty of care, a duty to obey instructions and a duty of loyalty
