Agency Flashcards
Agency
Agency is the fiduciary relationship that exists between an agent and principal where the agent acts on principal’s behalf and is subject to principal’s control
Binding Agency Contracts
An agent may bind a principal to a contract if the agent is acting within his actual or apparent authority.
Actual Authority
The agent reasonably believes in accordance with the principal’s manifestations, the principal wishes the agent to act.
may be express or implied
Actual Express Authority
The principal explicitly conferred authority on the agent.
written or oral
Actual Implied Authority
Agent believes, based on reasonable interpretation of principal’s words or conduct, that principal wishes him to act.
1) agent believes action is necessary to carry out express authorized duties,
2) agent acted similarly in prior dealings
3) it is customary for agents in position to act that way
Apparent Authority
A third-party reasonably believes that a person/entity has authority to act on behalf of the principal and belief is traceable to principal’s manifestations:
1) agent’s position/title indicates authority
2) principal held agent out as having authority
3) principal cloaked agent with authority
Ratification of Agent Contracts
Ratification occurs when principal:
1) has knowledge of all material facts or contract terms, and
2) thereafter manifests assent through words or conduct
Agent Contractual Liability
Generally, NO liability to third party if he:
1) fully discloses the principal, and
2) had actual/apparent authority
Employee
An agent whom the employer controls the manner and means of agent’s work.
Independent Contractor
A person who contracts with another to do something for him, but is not controlled.
Determination of Employee v. Independent Contractor
Whether the principal had the right to control the manner and method in which the job is performed.
Factors Determining Whether Agent is Employee
1) extent of control over the work
2) if agent is engaged in distinct occupation or business
3) type of work
4) how agent is paid (hourly/per project)
5) who supplied equipment or tools
6) degree of supervision
7) degree of skill required
8) whether job part of regular business
9) length of time
10) belief of relationship
11) whether hired for business purpose
Doctrine of Respondeat Superior
An employer is vicariously liable for an employee’s negligent acts if the employee was acting within the scope of employment when:
1) performing work assigned by employer, or
2) engaging in conduct subject to employer’s control
Factors Determining Scope of Employment
1) kind employee is employed to perform
2) occurs substantially within the authorized time and space limits
3) motivated to serve the employer
