Agency

Question 1

Actual authority

Answer 1

P causes A to reasonably believe A has authority to act

Question 2

Apparent authority

Answer 2

P causes a 3P to reasonably believe the agent has authority to act

Question 3

Ratification

Answer 3

P affirms the contract made on P’s behalf with knowledge of material facts

Question 4

Estoppel

Answer 4

P may be barred from denying an agency relationship or A’s authority if 3P detrimentally relied and P’s negligence caused the belief or P failed to correct the mistake

Question 5

Agent’s duties

Answer 5

• Duty of loyalty
• Duty of reasonable care
• Duty of obedience
• Duty of notification and accounting

Question 6

Agent’s duty of loyalty

Answer 6

• Only work for P’s benefit
• Not compete, usurp P’s business opportunity, or take secret profits

Question 7

Agent’s duty of reasonable care

Answer 7

Perform with reasonable diligence and skill

Question 8

Agent’s duty of obedience

Answer 8

To obey reasonable instructions

Question 9

Duty of notification and accounting

Answer 9

Must keep P informed and account for funds

Question 10

Principal’s duties

Answer 10

• Duty to compensate per express or implied agreement
• Duty to deal fairly and in good faith and provide a safe work environment
• Duty to cooperate and not interfere with A’s work
• Duty to indemnify and reimburse for losses if not resulting from A’s wrongful conduct

Question 11

Doctrine of vicarious liability

Answer 11

Asserts that a principal is liable for the acts of an agent, even though the principal is innocent of fault and not directly guilty of any tort or crime