Agency Flashcards
Creation of Agency Relationship
[ABC]
Assent: agent and principal must manifest assent
Beneft: A agrees to work for P’s benefit
Contol: A’s actions are subject to P’s control
Formalities
No consideration is required, though some states require a writing if it relates to an interest in real property under the equal dignities rule
Capacity
Principal: needs to have capacity to possess rights and incur obligations
Agent: minimal capacity
Termination of Agency relationship
either party can terminate it unilaterally
A’s authority may be revoked by P, by agreement, by changed circumstances, P’s death/incapacity after notice to A, if A’s power is coupled with an interest in the subject matter, P’s death does not revoke A’s authority
Contract Liability
P is contractually liable to a third party for the acts of A if A had actual or apparent authority
Actual Authority
Actual authority exists when P causes A to reasonably believe that A has authority
Express: through written or spoken words, A must reasonably beieve that she is doing what the P wants her to do; P’s contrary intent is ineffective
Implied: allows A to take whatever reasonable steps are necessary to acheive P’s objective, wihtin accepted business practice or custom
can occur through position of A or acquiesence
Apparent Authority
Apparent authority exists when P causes 3P to believe that A has authority
a 3P can have reasonable belief pased on past dealings, trade customs, inherently from A’s position (i.e. if A is vice president)
an imposter can bind P too if P is negligent
Ratification
Even if A did not have authority, the contract may still be binding on P if P, with knowledge of the material facts, affirms the contract
Estoppel
P may be barred from denying an agency relationship if a 3P detrimentally relied on it and P’s negligence caused the belief or P** failed to correct** the mistake
Agent’s liability for contracts
Disclosed principal: if 3P had notice and knew identity of P, A is not liable
Partially disclosed: 3P had notice of a P, but did not know the identity, A is liable
Undisclosed: if 3P did not know of agency relationship at all, A is liable
Tort Liability of P
P may be liable through respondiat suprerior, apparent authority, and direct liability,
Respondeat Superior
P may be vicariously liable for the tortious acts of A committed within the scope of employment
Typically, liable for acts of employee but not contractor
employee: P has the right to control manner and means of A’s perofmrance, provides tools, structures pay
Contractor may still be liable if P retains control over task, nondelegable duty, contractor has apparent authority, P is negligent in selecting/training contractor
Acting within the scope of employment
A was performing assigned work or acting subject to P’s control
exceptions: frolic (not detour), commuting, physical force unless part of the job, intentional torts unless part of hte job, acts independent of P’s purpose or benefit
Apparent Authority and Torts
P may be vicariously liable for A’s tortious act committed with apparent authority
Direct liability of P
P may be directly liable to a 3P for authorizing or ratifying tortious conduct, negligent selection/supervision of A, or delegating a nondelegable duty
