Agency

Question 1

Creation

Answer 1

Fiduciary relationship between an agent and a principal where the agent acts on the principal’s behalf created when: (1) parties voluntarily consent to enter into an agency relationship; and (2) the agent is subject to the principal’s control

Question 2

Termination of agency by parties

Answer 2

(1) agent or principal manifests to the other the desire to cease the relationship; (2) the express terms of the agency expire; or (3) the purpose is fulfiled

Question 3

Termination of agency by operation of law

Answer 3

(1) agent or principal dies; (2) the agent or principal loses capacity; OR (3) the agent materially breaches a fiduciary duty owed to the principal

Question 4

Actual authority

Answer 4

Agent reasonably believes, in accordance with the principal’s manifestations to the agent, that the principal wishes him to act

Question 5

Express authority

Answer 5

Principal directs agent to engage in precise task in question

Question 6

Implied authority

Answer 6

agent believes, based on a reasonable interpretation of the principal’s words or conduct, that the principal wishes him to act on the principal’s behalf

Question 7

Incidental authority

Answer 7

The agent’s authority to conduct a transaction includes the authority to engage in actions that are incidental to it, usually accompany it, or are reasonably necessary to accomplish it

Question 8

Apparent authority

Answer 8

(1) principal holds the agent out as having authority to act on the principal’s behalf and (2) principal’s conduct, when reasonably interpreted, causes a third party to rely on the agent’s appearance of authority when dealing with the agent

**obviously, apparent authority does not exist if the third party has knowledge that the agent does not have actual authority

Question 9

Inherent agency power

Answer 9

Inherent agency power allows courts to hold a principal liable for damages to third parties even when the principal’s agent acted without actual or apparent authority. Apply when:

(1) an agency relationship exists; AND
(2) the totality of the circumstances weighs against forcing the third party to absorb all of the damages

Question 10

When is principal bound?

Answer 10

actual authority, apparent authority, ratification

Question 11

Undisclosed or partially disclosed principal?

Answer 11

P and agent bound

Question 12

When is third party bound?

Answer 12

Third party bound to principal if valid authority existed; bound to agent if principal unidentified or undisclosed and agent enforces contract, but principal entitled to contract benefits

Question 13

Respondeat Superior

Answer 13

principal liable for employee agent torts if: (1) an employer-employee relationship exists and (2) employee’s commission was within the scope of employment.

Question 14

Factors for scope of employment?

Answer 14

(1) function for which he was hired to perform; (2) within the employer’s authorized time and space limits; (3) conducted to serve the employer; AND (4) foreseeable to the employer

Question 15

When are employers liable for intentional torts

Answer 15

(1) authorized by employer, OR (2) force is within the scope of employment in the employee’s work

Question 16

Factors re control of ind. contractor

Answer 16

(1) nature of the work; (2) skill required in the occupation; (3) who supplies the equipment or tools to perform the work; (4) method of payment; (5) length of employment; and (5) how the parties characterize the transaction

Question 17

When is principal liable for ind. contractor torts

Answer 17

ind. contractor: (1) makes misrepresentations for the benefit of the principal; (2) is engaged in abnormally dangerous activities; or (3) acts with apparent authority

Question 18

Ratification

Answer 18

A principal can ratify his agent’s unauthorized conduct, thereby making the principal liable to third parties for contracts entered into by the agent, if (1) the principal had knowledge of the material facts; (2) the agent purported to act on the principal’s behalf, and (3) the principal affirmed the agent’s conduct by manifesting an intent to treat the agent’s conduct as authorized.

Question 19

Agent’s fiduciary duties

Answer 19

(1) act with reasonable care and skill; (2) duty to act loyally for principal’s sole benefit; and (3) act obediently within the principal’s control