Agency

Question 1

What is the principal’s responsibility in agency?

Answer 1

The principal is responsible for the acts of the agent and may be vicariously liable in contract or tort.

Question 2

What are the four elements of agency formation?

Answer 2

1) Assent by principal to agent, 2) Agent acts on behalf of principal, 3) Subject to principal’s control, 4) Principal has contractual capacity.

Question 3

What is agency by estoppel?

Answer 3

Agency by estoppel occurs when a third party relies on the principal’s communication.

Question 4

Is writing required for agency formation?

Answer 4

No, writing is not required; only the agent’s reasonable belief that the principal granted authority to act on their behalf is necessary.

Question 5

What is the Equal Dignities Rule?

Answer 5

The Equal Dignities Rule requires that if a contract must be in writing, the agency agreement must also be in writing.

Question 6

What are the fiduciary duties of an agent?

Answer 6

The fiduciary duties of an agent include: a) Loyalty, b) Obedience to directions, c) Care.

Question 7

What remedies does a principal have against an agent?

Answer 7

The principal’s remedies include: a) Tort remedies, b) Disgorgement of profits, c) Withhold compensation.

Question 8

What are the duties of a principal to an agent?

Answer 8

The duties of a principal include: a) Reasonable compensation, b) Reimbursement, c) Duty to cooperate.

Question 9

What remedies does an agent have against a principal?

Answer 9

The agent’s remedies include: a) Contract remedies, b) Equitable lien on money due from principal.

Question 10

What is required for an agent to bind the principal by contract?

Answer 10

The agent must have had authority to act.

Question 11

What is actual express authority?

Answer 11

Actual express authority is granted through express manifestations to the agent, contained within the four corners of the agreement.

Question 12

What is actual implied authority?

Answer 12

Actual implied authority is when the agent has a reasonable belief that the act is necessary, within scope, based on custom, prior dealing, or emergency.

Question 13

What are the ways an agency can be terminated?

Answer 13

Agency can be terminated by: a) Actual lapse or reasonable time, b) Event occurrence, c) Unilateral termination, d) Operation of law, e) Breach by agent.

Question 14

What is apparent authority?

Answer 14

Apparent authority is the ‘cloak of authority’ where the principal holds out the agent to a third party, inducing reliance.

Question 15

What happens if a principal negligently allows an impostor to appear as an agent?

Answer 15

The principal is liable for the impostor’s actions.

Question 16

What is lingering apparent authority?

Answer 16

Lingering apparent authority exists when an agent has dealt with a third party, and the principal must notify the third party to terminate the authority.

Question 17

What is ratification in agency?

Answer 17

Ratification occurs when an agent acts without authority, and the principal validates those acts if they know all material facts, accept the transaction, and have capacity.

Question 18

What is the liability of a principal in contracts?

Answer 18

The principal is liable to a third party on the contract as long as the agent had authority to act (actual or apparent).

Question 19

How does a third party’s knowledge affect an agent’s liability?

Answer 19

An agent’s liability depends on the classification of the principal: a) Disclosed - agent not liable unless intended, b) Unidentified - agent/principal may be liable at third party’s election, c) Undisclosed - both agent and principal are liable at third party’s election.

Question 20

What is vicarious liability?

Answer 20

Vicarious liability means the principal is liable for torts committed by an employee within the course and scope of employment (respondeat superior).

Question 21

What defines the course and scope of employment?

Answer 21

Course and scope are defined by the nature of the job, time/place authorized by employment, and intent to benefit the principal (no intent to commit a tort).

Question 22

When is a principal not liable for an independent contractor?

Answer 22

A principal is not liable for an independent contractor unless there is negligent hiring, an inherently dangerous activity, or a non-delegable duty.

Question 23

What is estoppel in relation to independent contractors?

Answer 23

Estoppel occurs when a principal holds out an independent contractor as an employee, leading a third party to rely on that representation.

Question 24

What is the Agency Approach on Essay?

Answer 24

F - DAL

FORMATION?

(ABCC; Assent, Behalf Of, Control of P, Capacity)

DUTIES of Agent/Principal?

(remedies)

AUTHORITY to Contract?

(Actual Express/Actual Implied, Apparent, Estoppel & Ratification of K)

LIABILITY of Principal/Agent

(Contract Liability Depends; Undisclosed/Unidentified/Disclosed)

(Tort Liability Depends; Employee/Independent contractor..)