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Bar Exam > Agency > Flashcards

Agency Flashcards

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1
Q

three key parties

A

principal
agent
third party

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2
Q

requirements to form an agency relationship

A

1)agreement between the principal and the agent
2)the agent will act on behalf of the principal
3)the agent will be subject to the principal’s control

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3
Q

equal dignity rule

A

if the underlying transaction requires a writing, the principal’s authorization for the agency relationship must also be in writing

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4
Q

capacity

A

principal: to both consent to the relationship and for any underlying transaction that the agent may be conducting

agent: capacity to consent to what you have been appointed to do
minors can be agents

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5
Q

the principal- two types

A

non-employer principals
employer principals

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6
Q

non employer principals

A

look for relationships with looser control over the day to day activities of the agent

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7
Q

employer principals

A

look for greater control over the detailed activities of the agents, especially control over physical conduct
examples:
supplies tools at place of employment
pays the worker a regular paycheck
worker’s skill level is specialized
the principal directs the work to completion

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8
Q

types of agents

A

independent contractor agents
employee agents

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9
Q

independent contractor agents

A

look for relationships without control over day to day
other indicators:
agent maintains a high level of independence
agent is free for others
agrees to be paid a fixed fee
receives payment based on results
accepts responsibility to fix defects at own expense

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10
Q

employee agents

A

look for relationships with more control over day to day
other indicators:
tasks are generally completed under employer’s direction
employed for long periods of time by same person
paid on a regular basis

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11
Q

general vs. special agents

A

general: have broad authority over many tasks
special: limited authority for one task

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12
Q

subagents

A

appointed by another agent to help with a task for the principal
agent must have actual/apparent authority to do so

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13
Q

third party

A

look for someone who has interacted with the agent or principal
relationship will typically involve a contract or tort

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14
Q

ways that a principal is bound to a third party

A

1) agent has authority
2)principal is estopped from denying agent’s authority
3)the principal ratifies the K

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15
Q

primary types of authority

A

actual express
actual implied
apparent

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16
Q

actual express authority

A

the principal tells the agent to form a specific contract and the agent does it

agent’s understanding of the instructions must be reasonable

the manifestation from principal must reach the agent
can be communicated by other
can be by silence: if it would be reasonable for P to object

3rd party does need to know about the manifestation

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17
Q

when can express authority be conveyed by error

A

if the agent receives manifestation from the P that is intended for another agent and reasonably understands that the manifestation is to be towards them

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18
Q

actual implied authority

A

there is not an explicit instruction, rather agent is understood to be given authority to contract for activities that are properly related to the agent’s reasonable understanding of the objectives

3rd party doesnt need to know about the manifestation

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19
Q

ways to convey actual implied authority

A

normal business customs
by the position of the agent
by acquiescence/historical patterns between P and A
by an emergency

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20
Q

implied authority to delegate

A

agents normally lack the power to delegate
exceptions:
mechanical acts
customary acts in this sphere of business
acts that are impossible for the agent to perform himself

21
Q

apparent authority

A

manifestation from P to third party
agent’s authority to contract is derived from the 3rd party’s reasonable perception of the authority granted to the agent by the principal

agent doesnt need to know about the manifestation

third party’s belief must be reasonable

22
Q

manifestation that can create apparent authority

A

1)direct verbal/written statement from the principal
2)by the agent’s position

23
Q

imposter problem

A

occurs when an imposter agent purports to bind a principal under apparent authority: will not work unless it is negligent for the principal to allow the agent to have the appearance of actual authority

24
Q

ways to terminate an agent’s authority

A

terminate the agency relationship
revoke the authority by the principal
a dramatic change in circumstances
passage of a reasonable amount of time
death of the principal/agent
loss of capacity by the principal
breach of fiduciary duties by the agent

25
Q

estoppel

A

even when no authority, a principal may be bound to a third party

3rd party can successfully assert an estoppel claim when:
1)they reasonably believe a transaction was formed for the principal
2)the principal intentionally or carelessly caused that belief, and
3)the third party incurs a detrimental change of position

26
Q

ratification

A

a principal can be bound to a K brokered without authority with a third party if the principal ratifies the contract with the 3rd party

27
Q

important requirements for successful ratification

A

must ratify entire contract
P must have legal capacity to engage in the deal
ratification must be timely, and
P must have knowledge of all material facts

28
Q

two different theories of tort liability

A

vicarious
direct

29
Q

main theories of vicarious tort liability

A

respondeat superior
apparent authority

30
Q

main theories of direct tort liability

A

authorized conduct
negligent hiring/supervising
non-delegable duties

31
Q

respondeat superior

A

principal is liable to third parties for the tort of an agent when:
1)the agent is an employee agent, and
2)the tort is committed by the agent in the scope of employment

32
Q

scope of employment under respondeat superior

A

within scope when:
1) performing work that has been assigned by P, or
2) engaging in a course of conduct that is subject to the Ps control

frolic: significant detour- not covered
detour: minor deviation, covered

33
Q

vicarious liability under apparent authority

A

a principal is liable for the tort of an agent when the agent’s appearance of authority allows him to commit a tort
Elements:
1)3rd party reasonably believes that the agent acted with actual authority, and
2) this belief can be traced to some manifestation by the principal

34
Q

direct liability through authorized activity

A

a P is directly liable if she authorizes or intends tortious conduct by an agent

may be true even if the agent uses means other than what P intended

35
Q

direct liability through negligent hiring

A

P is directly liable if she negligently hires an agent or fails to provide reasonable supervision
apply tort requirements

36
Q

direct liability through non-delegable duties

A

some activities simply cannot be delegated to an agent
ex.: explosives, demolition

37
Q

agent’s liability as a party to the contract

A

normally not, depends on whether the principal is known/identified

38
Q

agent’s liability if the principal is disclosed

A

happens when the 3rd party knows about both the existence and the identity of the principal
unless agree otherwise, agent does not become a party

39
Q

agent’s liability if the principal is partially disclosed

A

3rd party knows about the existence of the P but not their identity
unless otherwise agreed, agent does become a party to the contract

40
Q

agent’s liability if principal is undisclosed

A

third party has no notice of the principal’s existence
agent does become liable for the contract

41
Q

can both principal and agent be liable to a third party

A

yes if the agent is personally liable and the agent has bound the principal

election of remedies: once 3rd party knows Ps existence, must usually choose to hold just one liable

42
Q

fraudulent concealment

A

when either the P or A has notice that the 3rd party would not wish to deal with the P
agent nevertheless contracts with the 3rd party for the principal and fails to make an affirmative representation about Ps identity
then 3rd party may avoid the contract

43
Q

agent’s tort liability to a 3rd party

A

personally liable for torts committed
not liable for torts that principal commits

44
Q

rights of the principal

A

1)principal can control the agent’s actions within the scope of their relationship
2) can expect the agent to perform all activities with reasonable care
3)can expect the agent to exercise a duty of loyalty
4) can expect to receive info from the agent related to any relevant issue
5)to receive an accounting of the agent’s activities on her behalf

45
Q

duties of the principal

A

1)treat the agent fairly and to act in good faith
2)honor the terms of the K
3) not to interfere with the agent’s work
4)indemnify the agent for losses incurred in connection with the relationship
exception: losses arising out of the agent’s own negligence or illegal acts

46
Q

rights of the agent

A

1) right to receive compensation (if agreed)
2)to perform work without interference
3) indemnification
4)safe working environment

47
Q

duties of the agent

A

duty of loyalty
performance-based duties

48
Q

duty of loyalty

A

an agent may not put her interests ahead of the interests of the principal
common situations:
1)may not deal as an adverse party in any transaction connected with the agency without Ps knowledge
2)may not acquire an unapproved material benefit in connection with actions undertaken in connection with relationship
3)may not usurp a business opportunity of P
4)may not compete with P
5)agent working with multiple Ps owes each P a duty of full disclosure and fair dealing
6) may not use the Ps confidential info for private gain

49
Q

performance based duties

A

1) duty of care: must exercise reasonable diligence and care in carrying out activities
2) must obey the Ps lawful and reasonable instructions
3) must provide relevant info to P if knows (should know) that P would wish to have the info
4) must keep and render accounts

Bar Exam (7 decks)

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