Agency

Question 1

When is an agency relationship created?

Answer 1

(1) Assent, (2) Benefit, (3) Control

Question 2

Duty of agent –> principal

Answer 2

Duty of care (act as a reasonably prudent person would in the situation), duty of loyalty (do not compete with business), duty of obedience (follow directions of principal)

Question 3

Duty of principal –> agent

Answer 3

compensation, reimbursement, and cooperation.

Question 4

Actual Authority –> Express

Answer 4

Provided orally or in writing from principal to agent.

Question 5

Actual Authority –> Implied

Answer 5

Agent reasonably believes based on principals: (1) customs, (2) prior dealings or (3) action necessary to carry out agents express duties.

Question 6

Apparent Authority

Answer 6

(1) third party reasonably believes that agent has authority to act and (2) the belief is traceable from the principals manifestations (principal holds out that agent can act on his behalf).

Question 7

Ratification

Answer 7

(1) Principal has knowledge of all material facts or contracts terms and (2) principal assents (approves) to same through words or conducts.

Question 8

Liability of Third Party v. Prinicpal

Answer 8

If agent had authority, principal is liable to the third party.

Question 9

Liability of Third Party v. Agent

Answer 9

Depends of whether principal is disclosed.

If disclosed (where third party knows of principals existence) –> principal is liable, agent is not (only principal can enforce the K)

If undisclosed –> both agent and principal are liable to third party and either can enforce the K

Question 10

Respondent Superior

Answer 10

Principal will be liable for agents tortious conduct that was conducted within the scope of employment.

Employer usually not liable for intentional torts.

Question 11

Independent Contractors

Answer 11

Principal is liable for acts of an independent contractors when: (1) inherently dangerous activities and (2) principal knowingly hires an incompetent independent contractor.