Agency

Question 1

How is an agency relationship created?

Answer 1

an agency relationship arises by mutual assent if principal and agent agree that the agent will act for the principal’s benefit and subject to their control

Question 2

What are the agents duties to the principal

Answer 2

loyalty, obedience, and care

Question 3

what are the principals duty to the agent

Answer 3

Good faith and to indemnify

Question 4

actual authority

Answer 4

agent reasonably believes, based on the principal’s manifestations, that the principal wishes the agent to act in that manner

Question 5

Apparent authority

Answer 5

third party reasonably believes, based on the principal’s manifestations, that the agent has actual authority to take a particular action

Question 6

inherent authority

Answer 6

authority that may be implied from the very nature of the relationship

Question 7

agency by estoppel

Answer 7

due to the principal’s failure to exercise reasonable care, a third party
1. reasonably believes that the purported agent is acting with actual authority AND
2. foreseeably, reasonably, and detrimentally changes position in reliance on that belief

Question 8

Ratification

Answer 8

confers authority after a purported agent has acted without authority. Principal must manifest assent to be bound by the act.

Question 9

How does an agent’s authority terminate?

Answer 9

principal’s death or loss of capacity, either party revokes the relationship, the occurrence of circumstances that should reasonably cause the agent to believe that the principal would no longer assent

Question 10

when is a principal directly liable for an agent’s torts?

Answer 10

1. conduct was in the scope of actual authority
2. tortious conduct is later ratified
3. principal is negligent is hiring or selecting the agent

Question 11

when is a principal vicariously liable?

Answer 11

respondeat superior
1. acting within the scope of employment
is an employee

Question 12

employee vs independent contractor factors

Answer 12

1. level of skill required to perform the work
2. who supplies tools or instrumentalities of work
3. duration of the relationship
4. whether the work is part of the principal’s regular business