Agency Flashcards
What is needed to create an agency relationship?
1) consent by both the principal and agent that the agent will act for the principal’s benefit
2) the agent is subject to the principal’s control
it is a good idea to start an agency Q w/ a. Brief discussion about creating an agency relationship
A _________ is liable for a contract entered into by an agent, so long as the agent had some kind of authority to enter into the contract.
Principal
partners are agents of a partnership and can bind the partnership if any authority exists
A principal is liable for a contract entered into by ______, so long as the agent had some kind of authority to enter into the contract.
An agent
A principal is liable for a contract entered into by an agent, so long as the agent had some kind of ______ to enter into the contract.
Authority
Partners are ______ of a partnership and can bind the partnership if authority exists.
Agents
Partners are agents of a partnership and can bind the partnership if _______ exists.
Authority
Express Actual Authority
The agent is expressly given authority to act for the principal.
the authority terminates by an act of the principal or death/incapacity of the principal
Even if an agent does not have any authority to enter into a transaction, the principal can _______ the acts (and thus become liable) by expressly or impliedly affirming or accepting the benefit of the act so long as he knew the material facts and had capacity.
Ratify
Even if an agent does not have any authority to enter into a transaction, the principal can ratify the acts (and thus become liable) by expressly or impliedly _______ so long as he knew the material facts and had capacity.
affirming or accepting the benefit of the act
The employer (principal) is liable in tort if the employee (agent): [SMI]
(1) was acting in the scope of employment, or
(2) made a minor deviation (a detour) from employment (rather than a major one - a frolic), or
(3) committed an intentional tort, only if it: [BAN]
(a) was for the principal’s benefit,
(b) was authorized by the principal, or
(c) arose naturally due to the nature of the employment
The employer (principal) is liable in tort if the employee (agent): [SMI]
(1) was acting in the scope of employment, or
(2) made a minor deviation (a detour) from employment (rather than a major one - a frolic), or
(3) committed an intentional tort, only if it: [BAN]
(a) was for the principal’s benefit,
(b) was authorized by the principal, or
(c) arose naturally due to the nature of the employment
The employer (principal) is liable in tort if the employee (agent): [SMI]
(1) was acting in the scope of employment, or
(2) _________, or
(3) committed an intentional tort, only if it: [BAN]
(a) was for the principal’s benefit,
(b) was authorized by the principal, or
(c) arose naturally due to the nature of the employment
made a minor deviation (a detour) from employment (rather than a major one - a frolic)
The employer (principal) is liable in tort if the employee (agent): [SMI]
(1) was acting in the scope of employment, or
(2) made a minor deviation (a detour) from employment (rather than a major one - a frolic), or
(3) committed an intentional tort, only if it: [BAN]
(a) was for the principal’s benefit,
(b) was authorized by the principal, or
(c) arose naturally due to the nature of the employment
was acting in the scope of employment
If a principal/employer is liable in tort under _________, an agent/employee is liable, too, under a theory of joint and several liability.
vicarious liability (respondent superior)
If a principal/employer is liable in tort under vicarious liability (respondent superior), an agent/employee is liable, too, under a theory of ________.
joint and several liability
Sometimes respondeat superior turns on whether an agent is an employee or independent contractor. If the agent is an independent contractor, the principal ___________.
is not generally liable, unless the duty was nondelegable.
Sometimes respondeat superior turns on whether an agent is an employee or independent contractor. If the agent is an independent contractor, the principal is not generally liable, unless ______.
The duty was nondelegable
3 Duties Owed By Agent
- Duty of Care
- Duty to Obey Instructions
- Duty of Loyalty
An independent contractor is generally not considered _____.
An agent
An independent contractor is generally not considered an agent. A key factor in determining whether a worker is an independent contractor or employee is ________.
the level of control the principal exercises over the worker
An independent contractor is generally not considered an agent. A key factor in determining whether a worker is an independent contractor or employee is the level of control the principal exercises over the worker.
A principal is thus generally not liable for the torts committed by an independent contractor unless:
(1) the duty is nondelegable (e.g., inherently dangerous activity), or
(2) if estoppel is present (I.e., if the principal holds out a contractor as an agent and there is reliance by a third party, the principal may be held liable for the contractor’s actions.)
A principal is liable for a contract entered into by an agent, so long as _______.
the agent had some kind of authority to enter into the contract
3 Types of Authority
- Actual (express & implied)
- Apparent
- Ratification
Apparent Authority Elements
(1) the person dealing with the agent must do so with a reasonable belief in the agent’s authority, and
(2) the belief must be generated by some act or neglect on the part of the principal
2 Ways for Principal to be Liable for Agent’s Torts
- Vicarious Liability (Respondeat Superior)
- Direct Liability of Principal (negligent hiring/supervising/firing)
Agent’s Duty of Loyalty
Agent must not:
(1) engage in self-dealing
(2) take an opportunity that belongs to the principal, or
(3) make a profit without disclosure
Director & Officer Authority
__________ may be (1) express or (2) implied.
Express authority manifests from:
(1) oral and written words,
(2) direct and definite language, or
(3) specific instructions.
Corporate bylaws, articles of incorporation, or the board of directors define actual express authority for an officer.
Actual authority
Director & Officer Authority
Actual authority may be (1) express or (2) implied.
Express authority manifests from:
____
____
____
Corporate bylaws, articles of incorporation, or the board of directors define actual express authority for an officer.
(1) oral and written words,
(2) direct and definite language, or
(3) specific instructions
Director & Officer Authority
Actual authority may be (1) express or (2) implied.
Express authority manifests from:
(1) oral and written words,
(2) direct and definite language, or
(3) specific instructions
___________ define actual express authority for an officer.
Corporate bylaws, articles of incorporation, or the board of directors
Director & Officer Authority
Actual authority may be (1) express or (2) implied.
Express authority manifests from:
(1) oral and written words,
(2) direct and definite language, or
(3) specific instructions
Corporate bylaws, articles of incorporation, or the board of directors define actual express authority for _______ .
An officer
Director & Officer Authority
Actual authority may be (1) express or (2) implied.
Implied authority allows an agent to take actions _______ based on the agent’s reasonable understanding of the objectives. An officer has implied authority to perform tasks necessary to carry out the officer’s duties by virtue of the position.
necessary to achieve the principal’s objectives
Director & Officer Authority
Actual authority may be (1) express or (2) implied.
Implied authority allows an agent to take actions necessary to achieve the principal’s objectives based on the agent’s reasonable understanding of the objectives. An officer has implied authority to perform tasks _____ by virtue of the position.
necessary to carry out the officer’s duties
