Agency

Question 1

Agency

Answer 1

Fiduciary relationship that comes into being when a principal appoints an agent to act on the principal’s behalf and the agent consents to act

Question 2

Elements of Agency

Answer 2

1) consent
2) for the benefit of the principal
3) control

Question 3

Duties Agent owes to Principal

Answer 3

Duty of Care
Duty of Loyalty
-may not use position/information from position to benefit themselves or a third party
Duty of obedience

Question 4

Principals Duty to Agent

Answer 4

not fiduciary
-owes agent all the duties imposed by their contract, reasonable compensation and reimbursement

Question 5

Actual Authority

Answer 5

Principal appears to give agent authority to enter into a contract on the principal’s behalf (implied or express)
* This could be express—in writing for instance
* Or could be implied—from the nature of the relationship [ex: you are a leasing agent and while never specified that you can enter into contracts on Ps behalf—it is assumed that you do]
* Would the agent reasonable have believed based on circumstantial evidence that they had this authority

Question 6

Apparent Authority

Answer 6

actions of the principal make it appear to a third party that the agent can enter contract
* This can also come from custom

Question 7

Ratification

Answer 7

Agency relationship is created by ratification when an “agent” purports to act on behalf of a principal without any authority BUT the principal then validates the act and becomes bound

To occur: principal must
1. have knowledge or reason to know all the material facts
2. accept the entire transaction AND
3. have capacity

Question 8

Un-IDED or Disclosed Principals

Answer 8

either the p or a can be held liable on the if the a had authority to enter

either P or a can enforce the contract and hold 3rd party liable

Question 9

Liable for Torts

Answer 9

under (1) respondeat superior and 2) apparent authority