Agency Flashcards
when might a state require an agent’s appointment to be in writing?
when the agency relates to interests in property (e.g. power of attorney)
what is the primary way to establish status as a principal?
individual’s intent to delegate an act and control the way in which an act is performed by another
partnership defined
A partnership is an association of two or more persons for the purpose of carrying on as co-owners of a business for profit
who may serve as an agent?
any person with minimal capacity (need not have capacity to form K
the consensual nature of the agency relationship requires an agent to:
- have minimal capacity
- manifest assent and consent to act on the principal behalf; and
- manifest assent to be subject to principal’s control
steps for establishing agency relationship
- Principal manifests assent to agent
- agent acts on P’s behalf
- agent’s actions are subject to P’s control
- agent manifests assent (or otherwise consents)
what is the dominant factor in determining whether someone is an employee?
the level of control an employer exerts over an agent’s day to day activities
most important factor in determining whether someone is an independent contractor
not subject to principal’s control regarding physical conduct (i.e. means and methods) of agent performance
what other term might an IC be referred to as?
a non employee agent
what relationship is present between a trustee and the settlor (person who puts property in trust for beneficiaries)?
trustee is agent who maintains a fiduciary relationship with and holds property for benefit of settlor
characterize the relationship of an employee of an advertising firm working on the account of a firm’s customer
the employees working on a customer’s case are considered subagents of the firm. the firm is liable to the principal for the employees’ conduct
what duty does a subagent have?
a duty of loyalty to both principal and appointing agent
difference in capacity requirements for principal vs. agent
a principal, to be bound by agent’s actions and to enter into the relationship, must have capacity both to 1. consent to to agency rel and 2. enter into transaction to which agent purports to bind principal (e.g. contract)
vs. can be agent so long as physical and mental capacity to do what appointed to do
can an unincorporated association have the capacity to form agency relationships? (and what is an unincorporated association?)
it’s a non-legal entity where people voluntarily associate with mutual consent or purpose - like a club
they do not have the capacity to form agency relationships
equal dignities rule
requirement present in some statutes that require a writing for principal’s authorization of an agent to be valid (the dignity of an agreement is “equal” to the underlying transaction). protects the principal against third party actions
but NOT against action brought by agent against principal (b/c 3rd party can ask to see the writing and if they don’t they’re SOL)
An agent has the power to bind the principal to a K when…
i. the agent has actual authority (express or implied);
ii. the agent has apparent authority; or
iii. the principal is estopped from denying the agent’s authority.
for express (actual) authority to exist, what is required? (and by what standards are they measured)?
the principal’s manifestation must
- cause the agent to believe that the agent is doing what the principal wants (subjective standard)
- and the agent’s belief that they are doing what the P wants must be reasonable (objective standard)
define implied actual authority
allows an agent to take whatever actions, designated or implied in P’s manifestations, are properly necessary to achieve P’s objectives, based on agent’s reasonable understanding of the manifestations and objectives of the P
common sources of implied authority based on acquiescence
- principal’s acceptance of agent’s acts as they occur; or
- principal’s failure to object to unauthorized actions of agent that
2a affirm agents belief that those actions further P’s objectives; and
2b support the agent’s perceived auth to act in future
what is apparent authority derived from?
reasonable reliance of third party on that party’s perception of level of auth grants to agent by principal,
based on principal’s behavior over period of time
difference between implied and apparent authority
implied authority pertains to the agent’s belief that they are authorized, whereas
apparent authority relates to the belief of a third party
difference between implied authority vs. authority by estoppel
for estoppel, 3rd party must establish that she acted in reliance or suffered detriment due to reliance on P’s manifestations
for apparent authority, change in position by 3rd party may serve as evidence
when might a principal be held liable for the acts of an imposter agent?
when P negligently allows imposter to have the appearance of actual authority to act on P’s behalf
termination of actual authority: 8 mechanisms
- principal’s revocation
- P’s agreement with agent
- change of circs
- passage of time
- P’s death or suspension of powers
- agent’s death or suspension of powers
- P’s loss of capacity
- statutorily mandated termination
when is revocation of consent to agency relationship effective?
when other party receives notice;
or terminating circumstances comes about that ought lead agent to reasonably conclude that principal no longer would asset to agent acting on P’s behalf
a P cannot revoke the authority of an agent if…
the agent’s power is coupled with an interest in the subject matter of the power
e.g. borrower cannot give property to lender in trust and revoke lender’s authority to sell upon default, since those are coupled
traditional vs. modern approaches to determination of whether agency relationship terminates on death
common law: P’s death terminates all power of agent to act regardless of agent or third party notice
modern: principal’s death does not terminate agent’s authority to act until the agent has notice of the P’s death
elements of P ratification of agent conduct
- P must ratify entire act, K, or transaction (by express manifestation or conduct justifying real assumption of consent)
- P must have legal capacity to ratify at time (+ 3rd party)
- P’s ratio must be timely before 3rd party withdraws
- P must have known of material facts involved in original act
a principal is an employer if…
the principal has the right to control the manner and means of the agent’s performance of work on the employer’s behalf
an employee acts w/in the scope of employment when either…
- performing work assigned by the employer, or
- engaging in a course of conduct subject to the employer’s control
to what extent can an employer be vicariously liable for an employee’s criminal tort?
may be tortiously liable if w/in scope of employment, but the more serious the criminal conduct, the more likely it is not viewed as serving the purpose of the employer
an intentional tort may fall within the scope of employment when…
- the conduct is w/in the space and time limits of the employment (e.g. force is inherent)
- agent was motivated in part to act for employer’s benefit; and
- act was the kind employee hired to perform
VC for employee acts: commuting
travel between work and home by employee not within scope of employment, except when employer
1. provides employee with vehicle and
2. asserts control over use of vehicle
OR
3. engages in task for employer’s benefit while commuting
define frolic
when an employee’s personal errand involves a significant deviation from the path that otherwise would be taken for the purposes of performing work
contrast detour (may include during workday personal errand)
exceptions to general bar on VC for ICs
- P who retains control over time or task that is source of tortious conduct (e.g. franchisor who controls franchisee)
- when IC has apparent auth;
- principal hires IC for non-delegable duties (e.g. inherently dangerous);
- when P is negligent in selecting, training, or supervising IC
when is a principal vicariously liable for tort committed by agent with apparent authority?
when agent’s appearance of authority enables her to commit tort or conceal its commission (e.g. fraudulent and negligent misrepresentation, tortious inst of legal proceedings, property conversion, defamation)
when is a principal directly liable to a third person harmed by an agent’s conduct?
if the principal
1. authorizes or ratifies the agents conduct (may be implied - like in intending its consequences)
2. is negligent in selecting, training, supervising, or OT controlling the agent;
3. delegates to agent performance of non delegable duty to use care to protect other persons or their property, and agent breaches duty
whether agent becomes a party to a contract depends on…
- terms of K
- degree to which agent discloses to 3rd party the existence and ID of principal
election of remedies doctrine
approach that some jx have adopted for situation where both agent and P are parties to K with third person
means 3rd party must choose to hold liable either P or A
implied warranty of authority
given by agent / actor purporting to be agent to third person with whom agent enters into K on P’s behalf
breached when ‘agent’ lacks power to bind principal (but only if P is partially or fully disclosed)
but NOT if apparent authority applies (even if no actual auth)
requirements for fraudulent concealment
only applies if P or agent had notice the third party would not have dealt with principal; suspicion insufficient
two basic types of duties agent has to principal
- duty of loyalty (includes fiduciary duty)
- performance-based duty (includes duty of care)
agent’s duty to account for profits
agent may not benefit monetarily from transactions conducted for principal
agent’s duty of care
agent has duty to act with the care, competence, and diligence normally exercised by agents in similar circumstances as reflected by local community standards
special skills and knowledge are taken into account
five most important duties of agent to principal
- duty of care to perform with reasonable diligence and skill
- duty to provide info to principal regarding all matters relating to agency relationship
- duty of loyalty to principal and to work only for his benefit
- duty of obedience to principal
- duties not to usurp a business app from principal / take financial gain / provide accounting / not commingle property
