Agency Flashcards
What is an agency relationship?
A voluntary, fiduciary relationship between two parties. The principal authorizes the agent to act on the principal’s behalf, and can act within that authority to bind the principal.
What is an employer-employee relationship?
The employer has the right to control what the employee does and how the employee does it.
What is an employer-independent contractor relationship?
Employer has the right to control only what the contractor does, not how they do it.
Less liability for employer here.
What is required to create an agency relationship?
A manifestation of the principal’s intent and of the agent’s consent.
Principal must have contracting capacity, agent must have minimum capacity to consent.
What is agency by ratification?
Allows a principal to grant retroactive authority for agent’s earlier unauthorized action done on behalf of the principal or purported to be done for the principal.
What must the principal have to ratify an agent’s actions?
- contractual capacity at the time of ratification
- knowledge of all material facts concerning the transaction
How does a principal ratify an agent’s action?
- manifesting assent that the act shall affect the principal’s legal relations
- conduct that is justifiable only on the assumption that the principal consents to be bound.
What duties are owed by agents to principals?
- Duty of care - follow reasonable instruction, with reasonable care, indemnify
- Duty of loyalty
- Duty to account
- Duty of candor
What duties are owed by principals to agents?
- Duty of compensation
- Duty of reimbursement
When is authority implied to agents?
- anything necessary to accomplish the principal’s express request of agent
- those things the agent believes the principal wishes the agent to do based on the agent’s reasonable understanding of the principal’s expressed request
When is a principal accountable when an agent acts under apparent authority?
When the 3rd party belief is reasonable and traceable to a manifestation of the principal.
When is an agent responsible to a 3rd party?
Not responsible for a disclosed principal.
Must make clear to the 3rd arty that the agent is representing a principal and that the agent is not a party to the contract
What is respondeat superior?
An employer is vicariously liable for the torts of employees when the tort is committed within the scope of employment.
Employer and employee are jointly and severally liable.
When is an employer held liable for the intentional torts of an employee?
Not generally.
Responsible when:
- tort is in the course of doing the employer’s work
- for the purpose of accomplishing the work
When does a principal have contractual liability arising from an agent’s apparent authority?
When the principal’s words, actions, or failure to act causes the 3rd party to reasonably believe that the agent is authorized.
