Agency

Question 1

List the requirements for creation of an agency relationship.

Answer 1

Principal with capacity and, if agent’s contracts must be evidenced by a record, a record of creation.

Question 2

Define independent contractor.

Answer 2

One who is doing work for another but whose actions and schedule are not directly controlled by that party. Example: a lawyer handling one case for a client.

Question 3

Define principal.

Answer 3

One who appoints an agent to act on his or her behalf.

Question 4

Define agent.

Answer 4

One who acts on behalf of another (the principal).

Question 5

Define “special agent.”

Answer 5

Agent who is limited in time and/or scope of agency; could be agency for a specific task.

Question 6

Define “agency relationship.”

Answer 6

Legally binding arrangement in which one party (agent) acts on behalf of another (principal).

Question 7

What actions by a party can lead to the termination of an agency relationship?

Answer 7

Fulfillment of purpose;
Lapse of time;
Occurrence of a specified event;
Mutual agreement;
Act of one party (exception: agency coupled with an interest).

Question 8

What acts by the operation of law can lead to the termination of an agency relationship?

Answer 8

Death or insanity of principal or agent;
Bankruptcy (of the agent if it impairs his duties, of the principal if the agent no longer desires the relationship);
Change of law;
Loss or destruction of subject matter.

Question 9

Define “general agent.”

Answer 9

Agent who is given general authority for the principal, i.e., not limited to specific transactions.

Question 10

Define “power of attorney.”

Answer 10

A name for a written document that creates an agency relationship.

Question 11

What is the basis of an agency relationship?

Answer 11

Consent of the Parties.

Question 12

What elements are not necessary for an agency relationship to exist?

Answer 12

Capacity and Consideration.

Question 13

___ ___ is the liability of principal for torts of agent in master/servant relationship when torts are committed by agent with authorization of scope of employment.

Answer 13

vicarious liability

Question 14

Describe the concept of respondeat superior.

Answer 14

“Let the master answer;” doctrine that holds principal liable, in certain circumstances, for the torts of the agent.

Question 15

List the forms of the principal-agent relationship.

Answer 15

Master-servant (principal usually liable for agent’s torts);

Employer-independent contractor (principal usually not liable).

Question 16

Does a principal have the right to control the method and manner of an agent’s work?

Answer 16

Yes, if a master-servant relationship exists.

No, if an independent contractor relationship exists.

Question 17

Who is liable for the agent’s torts if the principal is at fault?

Answer 17

Liability of a principal.

Question 18

Describe the master/servant relationship.

Answer 18

Type of relationship in which principal controls the activities of the agent; principal has liability for agent’s torts in this relationship.

Question 19

Define “scope of employment.”

Answer 19

Measure for determining when a principal is held liable for the torts of an agent.