Agency Flashcards
Agency Opening Statement
Agency is the fiduciary relationship created when a person consents to act on behalf of a principal in affecting legal relationships with third parties.
When does an agency agreement need to comply with the SOF?
If the subject of the agency is land, requires over one year to complete, or an applicable state statute requires a writing.
What is a del credere agent?
A del credere agent personally guarantees that his customers will pay the principal.
When is there implied authority in an agent?
Implied authority may result from necessary or usual acts in carrying out expressly-authorized functions or from prior dealings or the nature of the relationship. Implied agents include business managers, salespeople, delivery persons, and purchase agents.
When is there apparent authority in an agent?
If the principal’s actions led an ordinarily prudent person to reasonably believe the agent had authority, the principal may be liable (or by estoppel if principal’s omissions lead to reliance).
What is ratification?
A principal is not usually bound by unauthorized acts, but ratification (with knowledge) cures the lack of authority and relates back to the contract date (implied by taking the benefits).
When is an agent liable to third parties?
For contract liability, an agent is not liable with disclosure and identification of the principal (but is if he misrepresented his scope or is del credere). Both agent and principal are liable for an undisclosed principal (but one recovery). The undisclosed principal can still enforce the K unless the agent purposely concealed his ID.
For tort liability, the principal has respondeat superior for even unauthorized acts (unless frolic/detour), but is not liable for independent contractors unless they are performing non-delegable dangerous activities.
What are an agent’s duties?
Fiduciary duties of honest dealing, obedience, loyalty, trust, full disclosure, no conflicts of interest. An agent may delegate with permission, but both are liable. He must use reasonable care to obey instructions and inform the principal of relevant facts. Along with principal, he has a non-exclusive right to use workplace inventions (unless hired as an inventor). If he exceeds authority, he is liable to the third party, and to the principal for damages less the benefit received.
What are the principal’s duties?
Reimbursement and indemnification for liability from duties performed under his direction, a safe workplace, compensation (unless in K), assumption of risk is abolished (liable for workplace injuries), and the fellow servant rule (workers comp even if the injury was caused by another employee if authorized by management).
How is agency terminated?
Voluntary termination: completion, agreement, breach, revocation, renunciation, at-will employment (w/o cause) Involuntary termination (ISIS): incapacity/death of principal, source of agency supply destroyed, illegality of the agreement, subject matter of agency destroyed. (An agency coupled w/ an interest is irrevocable. Need actual notice of termination to past customers, constructive notice by publication to third parties w/ no prior dealings.)
