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
Agent’s liability for torts
A is liable to the 3P for their own actions, but not the actions of P
Agent’s duties
Duty of loyalty
duty of reasonable care
duty of obedience
duty of notification and accounting
Principal’s duties
duty to compensate per agreement
duty to deal fairly and in good faith, provide safe work environment
duty to cooperate and not interfere
duty to indemnify and reimburse for A’s losses
Remedies for A
Breach of contract, injunctive relief, tort damages, recission, unjust enrichment
Principal’s remedies
breach of contract, recission, injunctive relief, tort damages, restitution, accounting, recovery of secret profits, forfeiture of compensation
