agency

Question 1

agency

Answer 1

fiduciary relationship between an agent and principal where agent acts on behalf of agent and is subject to principals control.

Question 2

creation of agency relationship

Answer 2

agency is created by consent and control ane a acting on behalf of P - manifestation of consent (either expressly or impliedly) from P and A to enter in agency relationship and A is subject to P’s control

Question 3

actual authority

Answer 3

agreement between P and A creates agency - doesnt have to be in writing BUT clear agreement on BOTH parties

Question 4

apparent authority

Answer 4

principal holds out A as their agent to a third party

Question 5

retroactive creation of agency

Answer 5

P agrees retroactively to acknowledge agency and create relationship based on A’s previous unauthorized acts of agency

Question 6

termination of agency

Answer 6

agency is terminated by act of either paty, the agreement or by operation of law

Answer 7

a/p dies, a/p loses capacity, a materially breaches fiduciary duty owed to principal

Question 8

A’s duty of loyalty

Answer 8

a owes a duty of loyalty to P- meaning that A has a fiduciary duty of loyalty to principal. A must act with the utmost fairness to P, putting P’s needs at the forefront

Question 9

a’s breach of duty of loyalty

Answer 9

a breaches fiduciary duty of loyalty when they treat P as an adverse party, failure to disclose adverse/competing interest,

Question 10

A’s duty of care

Answer 10

A must carry out his role as A, acting on behalf of P, with reasonable care (community standards)

Question 11

A’s duty of notice (included in duty of care)

Answer 11

a has a duty to notify P of all agency-related matters that come to agents attention and all such matters must be imputed to P

Question 12

A’s duty of obediance

Answer 12

A must obey P’s lawful instructions, any issue of interpretation must be reasonable in the circumstances

Question 13

P’s duties to A

Answer 13

P has the duties of compensation, reimbursement and cooperation to A in the agency relationship. P owes agent reasonable compensation unless otherwise agreed to act gratuitously, P must indemnify agent for expenses and losses reasonably incurred carrying out agents duties (and legal liability), and P must cooperate with agent to help carry out agency functions

Question 14

liability w/ actual authority

Answer 14

P will be bound by A’s actions if A had actual authority, then p will be bound regardless of a third party knew of A’ authority

Question 15

A’s liability when acting with actual authority

Answer 15

A cannot be held liable to P as long as A acted within the scope of their authority

Question 16

P’s liability when A acts with apparent authority

Answer 16

P will be bound to a k if A is acting with apparent authority BUT a may be held liable for acting beyond scope of authority

Question 17

actual authority

Answer 17

A acts with actual authority when at the time of taking an act having legal consequences for the P, A reasonably believes that the p wish the a to act. standard = the authority a reasonably believes they possess based on dealings with principal

Question 18

express actual authority

Answer 18

P provides to A express actual authority via written or oral agreement from P to A - ex: P directs a to engage in a precise task

Question 19

implied actual authority

Answer 19

based on P’s actions words/conduct, A reasonably believes that he has authority to conduct such actions. this includes actions that may be incidental acts by A that are reasonably necessary to complete a task or transaction on which A has express actual authority on P’s behalf (ex: placing a job posting or interviewing a candidate in order to complete the express task of “hire a receptionist”)

Question 20

termination of actual authority

Answer 20

actual authority may terminate due to lapse in time, happening of an event (condition), change in circumstances

Question 21

P’s liability for A acting with apparent authority

Answer 21

even if no actual authority, a’s act will be binding on P if a third party can show that a acted with apparent authority (no apparent authority exists if third party knows that A does not have actual authority)

Question 22

apparent authority

Answer 22

P holds out A as having authority to act on P’s behalf AND P’s conduct causes a 3P to reasonably rely on the agent’s appearance of authority

Question 23

holding out - apparent authority

Answer 23

P must affirmatively act or fail to act in a way that causes a third party’s reasonable belief (mere assertion of authority by agent is insufficient to bind principal)

Question 24

affirmative act

Answer 24

wordsor conduct by principal that causes third party’s reasonable belief in agent’s authority

Question 25

inaction

Answer 25

inaction by principal where a duty to act exists that causes third party’s reasonable belief in agent’s authority (p has a duty to correct if he knows that third party wrongly believes that A has the authority to act)

Question 26

ratification

Answer 26

agent purports to act on behalf of P but LACKS authority to do son, P may still be bound by A’s actions if they subsequently ratify A’s unauthorized actions.

Question 27

3 ratification requirements

Answer 27

1. A purported to act on P’s behalf (entered into a K with 3P but lacked authority to do so)
2. P has knowledge or reasonably knew of material facts when A’s actions are affirmed/ratified
3. P subsequently affirms A’s action - affirming can be express or implied (implied would be if P acts in a way that is consistent with approvale of an otherwise unauthorized act) OR if P accepts the benefits of A’s unauthorizes act when there is still a chance to decline, P will be deemed to have ratified A’s actions

Question 28

effect of P ratifying

Answer 28

once P had affirmed or ratified A’s unauthorized acts, P is not liable for the third party for those actions ( ex: if P ratifies A’s actions of entering into a K with a third party without authority, P is now bound and liable to the K)

Question 29

Liability of P to third party

Answer 29

IF A had authority to act on belahf of P, then P is liable to third party based on A’s authorized/implied acts

Question 30

liability of A to third party

Answer 30

disclosed = if the third party knows of P’s existence and identity, then P is liable but not A and only P can enforce the k not A
IF undisclosed, then both A and P are liable to 3P and either can enforce the K

Question 31

respondeat superior - torts committed by A

Answer 31

P may be liable to third praties for torts committed by A acting as their employees

Question 32

respondeat superior

Answer 32

P’s liability arises for torts committed within scope of agency/employment - for torts outside scope of employment, RS does not apply BUT p can be held liable if A was acting with authority of P

Question 33

P is liable under RS if

Answer 33

1. employer-employee relationship exists between P and party that caused injury ( NOT usually independent contractors)
2. tortious conduct was committed within scope of employment

Question 34

tort is within scope of employment when

Answer 34

a. conduct was the same or similar in nature to that which the employee was hired toperform
b. tort was committed in sevice to empoyer and to further employee goals

Question 35

intentional torts

Answer 35

employer is generally not liable for employee’s intentional torts bc. = outside scope of employment HOWEVER employer can beheld liable where intentional tort occurs as a natural incident of carrying out employer’s business

Question 36

P’s liability for independent contractors

Answer 36

generally, P is not liable for acts committed by independent contractors bc., their work is outside the scope of employment of an employment/agency relationship

Question 37

Independent contractor

Answer 37

the distinguishing feature amongst ICs and employers turn on the P’s right to control the manner and method by which a person performs the job
- employee is compensated on a time basis = employee has a right to control the manner and method by which the employee performs the job
-IC hired to to doa specific/particular job, pai a given amount for particular job and p has limited rights to control the manner and method in which IC performs

Question 38

IC’s act which P is liable for

Answer 38

P can be held liable for IC torts where there is an inherently dangerous activities performed by IC and the knowingly. hires the IC to perform that inherently dangerous job