Agency Flashcards
Define vicarious liability for agency purposes
Principal is liable for the acts of an agent, even when principal is innocent and not directly guilty of a tort or crime
What are the 7 elements that identify someone as an independent contractor rather than an employee?
(1) bears risk and benefits
(2) maintains high level of independence
(3) free to work for others
(4) agrees to be paid a fixed fee
(5) receives payment based on results
(6) is liable for work performed
(7) accepts responsibility to remedy defects at own expense
What are 5 duties an agent owes a principal?
(1) duty of care
(2) duty to provide information
(3) duty of loyalty
(4) duty of obedience
(5) duty not to usurp business, take financial gain or commingle
When is a duty non-delegable in terms of an agency relationship?
Generally, when responsibility is so important to the community that a person should not be permitted to transfer it to another person
What are the 2 types of actual authority?
(1) express = created by words, clear and definite language, or specific terms and instructions
(2) implied = authority based on agent’s reasonable understanding of the manifestation of the principal
What is apparent authority for the purposes of an agency?
Derives from the reasonable reliance of a third party on that party’s perception of the level of authority granted to the agent by the principal
When does an agent have to the power to bind the principal to a contract?
When the agent acts with actual or apparent authority
When is a principal an undisclosed principal?
When principal is undisclosed, who is liable for the contract?
Third party has no notice of principal’s existence
Agent + third party = parties to the contract
Agent = liable for the contract
When is a principal a disclosed principal?
When principal is disclosed, who is liable for the contract?
Third party has notice of both (1) existence and (2) identity of principal
Agent does NOT become party to the contract
Principal + third party = parties to contract
When is a principal a partially disclosed principal?
When principal is partially disclosed, who is liable for the contract?
Third party has notice of principal’s existence, but not identity
Principal + third party + agent = parties to contract
What 4 elements must be present for a ratification by a principal to occur?
(1) principal ratifies entire contract
(2) principal and third party have legal capacity to enter into contract
(3) ratification occurs before third party withdraws from contract
(4) principal knows of material facts of transaction
What are the 3 exceptions where a principal may be vicariously liable for the torts of an independent contractor?
(1) task is inherently dangerous
(2) principal was negligent in hiring the contractor
(3) principal maintains control over certain tasks and tort occurs during one of those tasks
