Agency

Question 1

What are the requirements for an agency relationship?

Answer 1

(1) CONSENT by both the principal and the agent
that the agent will act for the principal’s benefit and
(2) that the agent is subject to the principal’s
CONTROL
Authority to act for the principal can terminate in several ways, including the principal
manifesting a desire to the agent to discontinue the relationship.

Question 2

The principal is bound to a contract entered into by an agent if the agent had ___ to enter the contract.

Answer 2

Authority (Actual or Apparent)

Question 3

Actual Authority

Answer 3

Actual authority can be EXPRESS, where the agent is expressly given authority to act for the principal. It can also be implied.

IMPLIED authority is present when the principal’s conduct
leads the agent to believe it has authority. This authority can be implied by custom, past course of
conduct by the principal, necessity, or an emergency circumstance. This authority terminates after
a reasonable time or following a change in circumstances, death, or incapacity of the principal, etc

Question 4

What are the two types of Actual Authority?

Answer 4

Express & Implied

Question 5

Apparent Authority

Answer 5

(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.

Question 6

Even if agent had no authority, principal can ___ the acts

Answer 6

RATIFY (and thus become liable) by affirming or accepting the acts, so long as Principal knew and had capacity

Question 7

What type of authority does partners in a General Partnership have?

Answer 7

actual and apparent authority to bind the partnership in Ks entered in the ORDINARY COURSE OF BUSINESS (same for LLCs)

Question 8

Undisclosed Principal

Answer 8

agent is liable if the principal is undisclosed, aka third party does not know the agent is acting on another’s behalf

Question 9

Partially Disclosed

Answer 9

third party knows agent is acting on behalf of another but does not know the identity of principal = agent still liable for breach of K if agent acts beyond authority

Question 10

Vicarious Liability of Employer (Respondeat Superior)

Answer 10

Employer is liable in tort for acts of an agent or employee if agent or employee (SMI)
- was acting in the SCOPE of employment
- made a MINOR deviation (detour) from employment;
- committed an INTENTIONAL tort only if it was (BAN) for the principal’s BENEFIT because the P AUTHORIZED it, or one that arose NATIURALLY due to the nature of the employment

Question 11

Who is liable under Respondeat Superior?

Answer 11

Employer & Employee (agent) under J/S liability

Question 12

May a principal indemnify (recover against) agent if agent acts beyond his authority?

Answer 12

YES

Question 13

If Principal (Employer) fails to act (fire/hire agent or properly supervise agent) who is liable?

Answer 13

PRINCIPAL is directly liable for own negligence