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2024 DC Bar Exam - UBE > AGENCY > Flashcards

AGENCY Flashcards

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1
Q

Agency

A

The fiduciary relationship that arises when two persons assent to having one act on the other’s behalf and be under the other’s control

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2
Q

Agent

A

Person appointed to act on behalf of and subject to the control of another person, the “principal”

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3
Q

Is consideration required for an agency agreement?

A

No

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4
Q

What type of capacity is required for an agency agreement?

A

Principal
- Contractual

Agent
- Minimal

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5
Q

Whose consent is required for an agency agreement?

A

Principal

Agent

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6
Q

Who must agent act on behalf of?

A

Principal

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7
Q

Who must agent act under control of?

A

Principal

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8
Q

Is writing required for an agency agreement?

A

Land transactions only (Statute of Frauds)

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9
Q

Can an agency agreement be formed without its formal requirements?

A

Yes

  • Act of parties (authority/ratification)
  • TP estoppel
  • Statute
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10
Q

What duties does Principal owe Agent?

A

(Not fiduciary)

Contractual duties
Reasonable compensation
Reimbursement for expenses
Cooperation with Agent
Not unreasonably interfere with Agent
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11
Q

What remedies may Agent exercise if Principal breaches his duties?

A

Contractual remedies
- Mitigate damages

Possessory lien

  • Due amounts
  • Compensation for services
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12
Q

What duties does Agent owe Principal?

A

Fiduciary Duties -

Contractual duties

Care: Reasonable prudence, competence, diligence

Loyalty: P’s interest above A’s

Obedience: Follow the P’s lawful instructions

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13
Q

What remedies may Principal exercise if Agent breaches his duties?

A

Contractual remedies
- Agent must be compensated

Tort remedies

Account for secret profits

Recover actual profits

Withhold compensation

  • Intentional breach
  • Intentional tort

Terminate agency

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14
Q

Actual Authority

A

The type of authority the principal grants to an agent, which exists regardless of the knowledge of any third party dealing with the agent

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15
Q

What is required for Agent’s actual authority?

A

Express -

  • Exists when the agent reasonably understood that the principal’s words conferred on the agent the power to act on the principal’s behalf

Implied -

  • Allows the agent to perform actions that are reasonably necessary, usual, and proper for accomplishing the task the principal has requested to be done
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16
Q

How can Agent’s actual authority be terminated?

A

Lapse of time

Specified event

Change in circumstances

Agent’s breach of fiduciary duty

Unilateral termination

Death of Principal/Agent

Lack of capacity

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17
Q

Delegation

A

An agent’s transfer of the agent’s authority to another, which generally is not allowed without express authorization from the principal

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18
Q

What is required for Agent’s apparent authority?

A

The type of authority that arise when a principal holds out or represents to a third party that the agent possesses authority, and the third party reasonably believes that such authority exists

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19
Q

What is required for ratification of Agent’s act?

A

1) Principal knew/should have known ALL material facts

2) Principal accepts ENTIRE transaction
- Express
- Implied (Accepting benefits/Silence/Enforcing lawsuit)

3) Principal has capacity
- Age
- Competency

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20
Q

Disclosed Principal

A

The type of principal whose existence and identity are known to the third party

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21
Q

Partially Disclosed Principal

A

The type of principal whose existence, but not identity, is known to the third party

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22
Q

Undisclosed Principal

A

The type of principal whose existence and identity are not known to the third party

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23
Q

What type of Principal may ratify Agent’s acts?

A

Second Restatement (Majority view)

  • Disclosed
  • Unidentified

Third Restatement
- Any

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24
Q

What are the exceptions to ratification of Agent’s acts?

A

Illegal performance

TP withdrawal

Material change towards TP’s position

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25
Q

When may Agent be liable to TP?

A

Principal is undisclosed

Principal is disclosed

  • Contract intent for Agent’s liability
  • Implied warranty

Principal is unidentified
- TP can elect defendant (if P/A objects)

Principal is identified
- TP can sue Principal (unless judgment satisfied)

26
Q

When may TP be liable to Principal?

A

Principal is disclosed

- P can enforce contract vs TP

27
Q

When may TP be liable to Agent?

A

Principal is undisclosed/unidentified

  • NO fraud misrepresentation
  • NO unforeseen increased burden on TP
28
Q

Is Principal’s liability dependent on Agent’s liability?

A

Yes (joint and several liability)

29
Q

What factors are used to determine whether agent is Employee or Independent Contractor (Respondeat Superior)?

A

1) Whether the work requires a greater skill level or specialized training;
2) Whether the agent has multiple clients or an independent business or distinct occupation separate from the principal’s business;
3) Whether the agent brings the agent’s own specialized tools to perform the work;
4) Whether the agent is paid by the job rather than a salary or ongoing hourly rate;
5) How many parties characterized the relationship in the agreement w/r/t the extent of control the principal exercises over details of the work; and
6) The actions of the parties to determine whether the principal controls the details of the agent’s work or has control over only the final result

30
Q

What is required for Employee acting within his scope of employment (Respondeat Superior)?

A

Act similar/Incidental to authorized job
- NOT criminal act

Detour/Small deviation

  • NOT frolic
  • NOT car ownership

Motivated to serve Employer
- NOT Employee’s passenger invitation alone (outside scope of employment)

Ratified act

Intentional torts (generally NO)

  • Natural incident
  • Promoting Employee’s business
  • Natural hostilities in Employee’s work
31
Q

What is required for apparent authority?

A

1) Agent deals on Principal’s behalf

2) Agent committed/concealed tort

32
Q

X retained Y to act as his agent. X did not have his representative present as he was still disabled from his injury. X solely agreed that Y must act for him only, and that Y may work under Z from time to time. Y refused to act because he did not provide anything in return and it was not in writing. Must Y act for X?

A

NO agency formed

  • NO capacity (X: incompetent)
  • NO consent from Y (only X)
  • Y was to act on X’s behalf
  • Y did not act under X’s control exclusively
  • NO consideration required
  • NO writing required (UNLESS land transaction - SOF)
33
Q

Y agreed to act as X’s agent in sending a sold product. X failed to pay Y for the transfer. How may Y claim remedies?

A

X’s breach of duty (NOT fiduciary) (as principal)

  • Breach of agency agreement
  • Failure to pay reasonable compensation/reimbursement for expenses

Y’s remedies

  • Contract remedies (X to mitigate damages owed by Y for its own breaches)
  • Possessory lien (over due amounts from X)
34
Q

Y agreed to act as X’s agent in selling clothes. Y decided to wear the clothes himself and show customers, although Y damaged them and took no responsibility. X has yet paid Y. How may X claim remedies?

A

Y’s breach of fiduciary duty of care (as agent)

  • Y acted not as reasonable prudent person would in like position
  • Y wore customer’s clothes

X’s remedies

  • NOT contract remedies (Y is NOT compensated) => Withhold compensation
  • Tort remedies (damages for vicarious liability)
  • Terminate agency
35
Q

Y agreed to act as X’s agent in selling clothes. Y decided to sell the clothes to one of his own companies and kept the profit for himself. X has already paid Y. How may X claim remedies?

A

Y’s breach of fiduciary duty of loyalty (as agent)
- Y engaged in self-dealing between himself + his own company

X’s remedies

  • Contract remedies (Y is compensated) => Damages
  • Tort remedies (intentional breach) => Damages
  • Terminate agency
  • Y to account for profits
36
Q

Y agreed to act as X’s agent in selling clothes. X specifically instructed Y to sell them to young children. However, Y went ahead and sold them to mature adults. How may X claim remedies?

A

Y’s breach of fiduciary duty of obedience (as agent)
- Y disobeyed X’s instructions in selling to young children only (NOT mature adults)

X’s remedies

  • Withhold compensation
  • Tort remedies (negligence) => Damages
  • Terminate agency
37
Q

Y agreed to act as X’s agent in selling clothes in State A. X told Y that so long as Y can find any buyer willing to pay above $100, Y should sell. Y went ahead and found a buyer in State B who was willing to pay $200. X was unhappy about the fact that the buyer is outside of State A due to higher delivery expenses. The buyer paid the $200 and wants the piece of clothing. Is X liable to Buyer?

A

Yes

  • Y’s contractual authority
  • Actual (implied - Y’s reasonable belief based on X’s manifestations re ‘any’ buyer)
38
Q

Y agreed to act as X’s agent in selling clothes in State A. Y went ahead and found a buyer in State B who was willing to pay $200. Y assumed that since X has negotiated with buyers across the country over the last few years, it was okay for Y to look for buyers outside of State A. X was unhappy about the fact that the buyer is outside of State A due to higher delivery expenses. The buyer paid the $200 and wants the piece of clothing. Is X liable to Buyer?

A

Yes

  • Y’s contractual authority
  • Actual (implied - X’s previous dealings with buyers outside State A)
39
Q

Y agreed to act as X’s agent in selling clothes in State A. X authorised Y to sell only to buyers in State A. However, Y went ahead and found a buyer in State B. The buyer signed a contract with Y as ‘agent’ of X. X was unhappy about the fact that the buyer is outside of State A due to higher delivery expenses. The buyer paid the $200 and wants the piece of clothing. Is X liable to Buyer?

A

Yes

  • Y’s contractual authority
  • NOT actual (X authorised Y to sell in State A, NOT State B)
  • Apparent (Buyer had reasonable belief Y had authority - Y signed contract as X’s agent) (Buyer relied on Y’s written authority)
40
Q

X needed an agent to sell his clothes. X received a random email recommending Y as his agent. X then agreed that Y may act as X’s agent in selling clothes. X authorised Y to sell only to buyers in State A. However, Y went ahead and found a buyer in State B. X was unhappy about the fact that the buyer is outside of State A due to higher delivery expenses. The buyer paid the $200 and wants the piece of clothing. Is X liable to Buyer?

A

Yes

  • Y’s contractual authority
  • NOT actual (X authorised Y to sell in State A, NOT State B)
  • Apparent (NO actual authority + X negligently hired Y as an imposter - recommendation based on random email)
41
Q

X agreed that Y may act as X’s agent in selling clothes. X authorised Y to sell only to buyers in State A. However, Y went ahead and found a buyer in State B, in which he informed X who was content with it. Later, X was unhappy about the fact that the buyer is outside of State A due to higher delivery expenses. The buyer paid the $200 and wants the piece of clothing. Is X liable to Buyer?

A

Yes

  • Y’s contractual authority
  • NOT actual (X authorised Y to sell in State A, NOT State B)
  • Apparent (NO actual authority + X knew of Buyer’s dealing)
42
Q

X runs a concern venue. X was currently in hospital due to a recent leg injury. X agreed that Y may act as X’s agent in purchasing amp equipment for X’s concert venue. X authorised Y to purchase only from sellers in State A. However, Y went ahead and found a seller in State B who was willing to sell for less than the original price. Y mentioned that he was working for someone, but not X. X was unhappy about the fact that the seller is outside of State A due to higher delivery expenses, although X did not know about the purchase price. Later, X installed only some of the amp equipment and conducted festivals. Y is yet to pay the seller. Is X liable to Seller?

A

NO

  • Y has NO contractual authority
  • NOT actual (X authorised Y to sell in State A, NOT State B)
  • NOT apparent (Y did NOT specify written authority to Seller)
  • NO ratification (X should have known of ALL material facts of deal including purchase price by inquiring into deal, BUT X did NOT accept ENTIRE transaction as X used only some of amp equipment + X is NOT competent (injured))
43
Q

X agreed that Y may act as X’s agent in purchasing amp equipment for X’s concert venue. X authorised Y to purchase only from sellers in State A. However, Y went ahead and found a seller in State B who was willing to sell for less than the original price. Y told Seller that he was working for X, but that he was actually only allowed to purchase in State A. X was unhappy about the fact that the seller is outside of State A due to higher delivery expenses, despite realising the discount that Seller was willing to give. Later, X installed the amp equipment and conducted festivals. Y is yet to pay the seller. Is X liable to Seller?

A

NO (Second Restatement - Majority view)
- X is disclosed + identified as principal => X can NOT ratify

Yes (Third Restatement - Minority view)

  • Y has contractual authority
  • NOT actual (X authorised Y to sell in State A, NOT State B)
  • NOT apparent (Y did NOT specify written authority to Seller)
  • Ratification (X knew ALL material facts of deal + X accepted ENTIRE transaction by installing ALL of amp equipment + X is competent)
  • X is disclosed + identified as principal => X can still ratify
44
Q

X agreed that Y may act as X’s agent in purchasing amp equipment for X’s concert venue. X authorised Y to purchase only from sellers in State A. However, Y went ahead and found a seller in State B who was willing to sell for less than the original price. X was unhappy about the fact that the seller is outside of State A due to higher delivery expenses, despite realising the discount that Seller was willing to give. Later, X installed the amp equipment and conducted festivals. However, since Y has yet to pay Seller, Seller wants to cancel the deal as he is concerned that acceptance of his discount will see revenue drop dramatically. Is X still liable to Seller?

A

NO

  • Ratification (X knew ALL material facts of deal + X accepted ENTIRE transaction by installing ALL of amp equipment + X is competent)
  • X’s ratification => Material change towards Seller’s position (lower revenue) + Seller’s withdrawal from deal => NO ratification => Y has NO contractual authority
45
Q

Y agreed to act as X’s agent in selling clothes in State A. X told Y that so long as Y can find any buyer willing to pay above $100, Y should sell. Y went ahead and found a buyer in State B who was willing to pay $200. Y told Buyer that he was working for someone as his agent. X was unhappy about the fact that the buyer is outside of State A due to higher delivery expenses. The buyer paid the $200 and wants the piece of clothing. Is Y liable to Buyer?

A

No

  • X is disclosed (NOT identified)
  • NO contract intent for Y’s liability
46
Q

Y agreed to act as X’s agent in selling clothes in State A. X told Y that so long as Y can find any buyer willing to pay above $100, Y should sell. Y went ahead and found a buyer in State B who was willing to pay $200. Y told Buyer that he was working for someone as his agent. X was unhappy about the fact that the buyer is outside of State A due to higher delivery expenses. The buyer paid the $200 and wants the piece of clothing. Buyer told Y he will sue Y, but Y refuses to pay. Is Y liable to Buyer?

A

Yes

  • X is disclosed (NOT identified)
  • Y refuses to be sued => Buyer can sue X or Y
47
Q

Y agreed to act as X’s agent in selling clothes in State A. X told Y that so long as Y can find any buyer willing to pay above $100, Y should sell. Y went ahead and found a buyer in State B who was willing to pay $200. Y told Buyer that he was working for X as his agent. X was unhappy about the fact that the buyer is outside of State A due to higher delivery expenses. The buyer paid the $200 and wants the piece of clothing. Is Y liable to Buyer?

A

Yes

- X is identified

48
Q

Y agreed to act as X’s agent in selling clothes in State A. X told Y that so long as Y can find any buyer willing to pay above $100, Y should sell. Y went ahead and found a buyer in State B who was willing to pay $200. Y told Buyer that he was working for X. X was unhappy about the fact that the buyer is outside of State A due to higher delivery expenses. Buyer received the clothing but has yet to pay the purchase price. Is Buyer liable to X or Y?

A

X
- X is disclosed => X can enforce contract vs Buyer

NOT Y
- X is disclosed => Y can NOT enforce contract vs Buyer

49
Q

Y agreed to act as X’s agent in selling clothes in State A. X told Y that so long as Y can find any buyer willing to pay above $100, Y should sell. Y went ahead and found a buyer in State B who was willing to pay $200. X was unhappy about the fact that the buyer is outside of State A due to higher delivery expenses. Buyer received the clothing but has yet to pay the purchase price. Is Buyer liable to X or Y?

A

Y
- X is NOT disclosed => Y can enforce contract vs Buyer

NOT X
- X is NOT disclosed => X can NOT enforce contract vs Buyer

50
Q

X agreed that Y may act as X’s agent in purchasing amp equipment for X’s concert venue to improve festival activity. Y was hired until X no longer required his services and that he would be paid on an hourly basis, rather than by full compensation. X authorised Y to purchase only from sellers in State A as Y did not have particular expertise in finding appropriate sellers across the country. However, Y went ahead and found a seller in State B who was willing to pay less than the original price. X was unhappy about the fact that the seller is outside of State A due to higher delivery expenses. Y has yet to pay Seller. Is X liable to Seller?

A

Yes

  • Respondeat superior (X is jointly + severally liable to Seller for Y’s actions)
  • Employer-employee relationship existed - X had right to control Y’s actions as employee (Y was hired to improve X’s business; Y was paid on-time compensation; Y was hired permanently; Y has NO particular skill/expertise)
  • Y acted within his scope of employment (motivated to serve X)
51
Q

X agreed that Y may construct X’s new company building of 50 stories based on Y’s substantial experiences. Y was hired for one year and was to be paid $100,000 once the building was constructed. One day, a pedestrian was walking by when Y was constructing the top floor and dropped a wrench on Pedestrian’s head. Pedestrian suffered injuries. Is X liable to Pedestrian?

A

Yes

  • Respondeat superior (X is jointly + severally liable to Seller for Y’s actions)
  • Y is NOT employee (Y was hired NOT to improve X’s business; Y was hired temporarily; Y was to be paid lump sum; Y had particular expertise)
  • Y is independent contractor + engaged in inherently dangerous activity (constructing 50-story building)
  • Y was acting within scope of employment (constructing building)
52
Q

X is a banker. X was about to enter a major $1 million corporate deal, but X suddenly suffered a heart attack. X asked Y, his secretary, to negotiate the deal with the client. Eventually, Y negotiated the deal but gave false information that led to Client suffering damages. Is X liable to Client?

A

Yes

  • Respondeat superior (X is jointly + severally liable to Seller for Y’s actions)
  • Y was given non-delegable duty (banking)
  • Y was acting within scope of employment (negotiating deal)
53
Q

X agreed that Y may repair X’s toilet. X was recommended to use Y’s services based on an anonymous email. One day, Neighbour was in his garden and Y was repairing the toilet when it suddenly exploded and caused damage to Neighbour’s garden. Is X liable to Neighbour?

A

Yes

  • Negligent hiring (X hired incompetent Y based on anonymous email) (X is liable to Seller for X’s actions, NOT Y’s actions)
  • NO respondeat superior (X is NOT jointly and severally liable to Seller for Y’s actions)
  • NO employer-employee relationship - Y is NOT employee (Y is NOT hired to further X’s business; Y has particular expertise; Y is hired temporarily)
  • Y is independent contractor (NO dangerous activity; NO delegation of duty)
54
Q

X agreed that Y may act as X’s agent in purchasing amp equipment for X’s concert venue to improve festival activity. X authorised Y to purchase only from sellers in State A as Y did not have particular expertise in finding appropriate sellers across the country. However, Y went ahead and contacted an upcoming indie rock band. Y assumed the band could derive more ticket revenue for X, although X only wanted hip hop artists to perform at his venue. Y has yet to pay Seller. Is X liable to Seller?

A

NO

  • NO respondeat superior (X is NOT jointly + severally liable to Seller for Y’s actions)
  • Employer-Employee relationship existed - X had right to control Y’s actions (Y was hired to improve X’s business; Y has NO particular expertise)
  • Y did NOT act within scope of employment (hiring artists is NOT similar/incidental to purchasing amp equipment)
55
Q

X hired Y to deliver his donuts to customers in the city. One day, Y was driving to deliver some donuts to a customer. Instead of taking the usual route, Y realised he left his baby son alone in his house. Y drove all the way back outside the city to the suburbs. On the way, Y suddenly crashed into a pedestrian without looking. Pedestrian suffered injuries. Is X liable to Pedestrian?

A

NO

  • NO respondeat superior (X is NOT jointly + severally liable to Seller for Y’s actions)
  • Employer-Employee relationship existed - X had right to control Y’s actions (Y was hired to improve X’s business; Y has NO particular expertise)
  • Y did NOT act within scope of employment (Major deviation/Frolic - Driving on different route outside city to Y’s home vs Driving on usual route to Customer’s house)
56
Q

X hired Y to deliver his donuts to customers in the city. One day, Y was driving to deliver some donuts to a customer. Y’s friend, Z, asked if Y could drop him off to a business meeting urgently. Y picked Z up and on the way, Y suddenly crashed into a pedestrian without looking. Z suffered injuries. Is X liable to Z?

A

Yes

  • Respondeat superior (X is jointly + severally liable to Seller for Y’s actions)
  • Employer-Employee relationship existed - X had right to control Y’s actions (Y was hired to improve X’s business)
  • Y acted within scope of employment (Motivated to serve X in delivering donuts => Y’s unauthorised invitation of Z as passenger is NOT relevant)
57
Q

X hired Y to deliver his donuts to customers in the city. One day, Y was driving to deliver some donuts to a customer. Y decided to take a detour by driving onto a farmer’s land, destroying his crops. Farmer was angry. Is X liable to Farmer?

A

NO

  • NO respondeat superior
  • Y did NOT act within scope of employment (Intentional damage to Farmer’s property)
58
Q

X hired Y to cut some trees as part of X’s logging company. Y was cutting trees in a client’s garden when some of the branches fell on Neighbour’s garden and damaged his garage. Neighbour was angry. Is X liable to Neighbour?

A

Yes

  • Respondeat superior (X is jointly + severally liable to Seller for Y’s actions)
  • Employer-Employee relationship existed - X had right to control Y’s actions (Y was hired to improve X’s business)
  • Y acted within scope of employment (Intentional trespass towards Neighbour’s garage - Natural incident to cutting trees)
59
Q

X hired Y to send out flyers promoting X’s nightclub events. One day, Y was sending out flyers from his van that flew onto Neighbour’s garden. Neighbour was not happy. Is X liable to Farmer?

A

Yes

  • Respondeat superior (X is jointly + severally liable to Seller for Y’s actions)
  • Employer-Employee relationship existed - X had right to control Y’s actions (Y was hired to improve X’s business)
  • Y acted within scope of employment (Intentional trespass towards Neighbour’s garden - Promoting X’s business)
60
Q

X hired Y as a bouncer for X’s nightclub. One night, a drunk man tried to enter the club without showing his ID. Y hustled Man and Man fell down suffering a leg injury. Is X liable to Man?

A

Yes

  • Respondeat superior (X is jointly + severally liable to Seller for Y’s actions)
  • Employer-Employee relationship existed - X had right to control Y’s actions (Y was hired to improve X’s business)
  • Y acted within scope of employment (Intentional battery - Natural hostility as part of X’s nightclub)
61
Q

X agreed that Y may bake a cake for X’s sister’s wedding. X hired Y on a temporary basis having reviewed Y’s services. X’s sister prepared her wedding believing the cake would be excellent. Y baked the cake for her and X’s sister tried the cake. However, X’s sister suddenly suffered food poisoning. Is X liable to X’s sister?

A

Yes

  • Respondeat superior (X is jointly + severally liable to X’s sister for Y’s actions)
  • NO Employer-Employee relationship (Y was hired temporarily)
  • Y is independent contractor
  • X’s sister can assert TP estoppel (prepared wedding based on Y’s services)
  • Y acted within scope of employment (served X by baking cake)
62
Q

X hired Y, a college band, for a one-time performance at X’s music venue while X was on holiday during the morning. Y decided to perform in the evening and a neighbour complained that the music was too loud. Y intentionally did not tell X about the complaint. However, Neighbour later complained to X as well. Is X liable to Neighbour?

A

Yes

  • NO respondeat superior
  • Y is NOT employee (hired temporarily)
  • Y did NOT act within scope of employment (Y performed in evening, NOT morning)
  • Apparent authority existed
  • Y acted on X’s behalf
  • Y commited + concealed nuisance (trespass by noise)

2024 DC Bar Exam - UBE (8 decks)

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