Agency

Question 1

What is an agency

Answer 1

The fiduciary relationship that exists between an agent and principal where the agent acts on the principal’s behalf and is subject to the principal’s control.

Question 2

Agency requirements (3)

Answer 2

1. Parties manifest assent to worth with one another
2. A agrees to work for P’s benefit
3. A agrees to work subject to P’s control

Question 3

Ways agency may terminate (5)

Answer 3

1. Unilateral notice
2. Express terms
3. Purpose fulfilled
4. Death/incapacity (might need notice)
5. Agent materially breaches duty

Question 4

Principal liability for contracts (5 ways)

Answer 4

1. Actual express authority
2. Actual implied authority
3. Apparent authority
4. Estoppel - Inherent agency power
5. Ratification

Question 5

Actual express authority

Answer 5

Written or spoken words that convey the scope of authority

Question 6

Actual implied authority (Definition and standard)

Answer 6

Conduct to convey authority to the A to take reasonably necessary steps to achieve P’s objectives

Standard: Within accepted business customs or general trade usage

Question 7

Apparent authority

Answer 7

Agent acts with AA when:
1. The P holds the A as having authority to act on the P’s behalf; and

2. Reasonable interpretation of P’s conduct caused 3P reliance on A’s appearance of authority

Question 8

Ratification of authority (contracts)

Answer 8

1. P ratifies entire contract
2. P and 3P have legal capacity to enter into K
3. Ratification before3P withdraws K
4. P knows material facts of transaction

Question 9

What generally determines the contractual liability of an agent to a third party?

Answer 9

The extent to which the principal is disclosed.

Question 10

Parties to a contract based on disclosure of principals:

1. Fully disclosed
2. Partially disclosed (knows A is working for P but actual P unknown)
3. Undisclosed (Neither A status or P identity known)

Answer 10

1. 3P and P
2. All 3 parties
3. 3P and P (assuming P had authority to bind A)

Question 11

Respondeant superior

Answer 11

A principal may be liable for the torts committed by an agent if:

1. An employer-employee relationship exists (vs IC relationship); and
2. EE/A commission of tort occurs within the scope of employment

Question 12

Determining whether ER/EE relationship exists

Answer 12

Primary factor is the extent of control the principal exercises over the details of the A’s work

Other factors: (i) nature of work; (ii) who supplies equipment; (ii) method of payment; length of employment; how parties characterize transaction

Question 13

When an A’s activity is within the scope of employment (factors)

Answer 13

1. Function the EE hired to perform
2. WIthin ER’s authorized time and space limits
3. Conduct to serve ER
4. Foreseeable to ER

Question 14

Frolic vs detour

Answer 14

Frolic: Major deviation from scope of employment (no ER liability)

Detour: Minor deviation from scope of employment (ER liability)

Question 15

Three instances where P can be liable for IC torts

Answer 15

1. Inherently dangerous task
2. Negligent hiring (kind of)
3. P retains control over act covering tort

Question 16

P liability for intentional torts (general and exceptions)

Answer 16

General rule: No

Exceptions (MAY be liable):

1. Conduct occurred within space and time limits of employment
2. A motivated to benefit P
3. Act is kind agent hired to perform

Question 17

Fiduciary duties of A to P

Answer 17

1. Exercise reasonable care
2. Loyalty
3. Obey reasonable instructions
4. Notification/accounting

Question 18

Agent duties of loyalty (2)

Answer 18

1. No usurping business opportunities
2. No secret profits