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N. C. Agency > Agency > Flashcards

Agency Flashcards

1
Q

What is an agency relationship?

A

An agency relationship is a voluntary, fiduciary relationship between two parties: the two parties are a principal and an agent

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2
Q

What can the agent do with respect to the principal?

A

The agent, acting within the scope of authority granted by the principal, binds the principal.

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3
Q

How can an agency relationship be established?

A

The relationship can be based on a contract, but does not have to be.

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4
Q

Two Types of Agency Relationships

A
  1. Gratuitous Agencies

2. Contractual Agencies

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5
Q

Gratuitous Agencies

A

The principal does not compensate the agent for the work the agent does on the principal’s behalf.

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6
Q

Contractual Agencies

A

E.g., employer-employee, employer-independent contractor

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7
Q

Steps to Agency Questions

A
  1. Is there an agency relationship
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8
Q

To create an agency relationship

A
  1. there must first be a principal who manifests an intent to: grant authority to another to act: (1) on the principal’s behalf; and, (2) subject to the principal’s control.
  2. Additionally, there must be an agent who consents to: the principals grant of authority
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9
Q

The principal and agent can manifest the requisite intent and consent in several ways:

A
  1. Expressly;
  2. Means of a writing or spoken words;
  3. Impliedly by conduct.
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10
Q

Capacity required for agency relationship

A

(1) a would-be principal must have the contractual capacity to effect transactions, and (2) a would-be agent must have minimum mental capacity.

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11
Q

Can a minor have capacity to be principal?

A

Generally, no

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12
Q

Agency by ratification occurs when

A

a purported agent’s unauthorized act on behalf of another is thereafter affirmed or ratified by this other party. Then, an actual principal-agent relationship is retroactively created.

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13
Q

Principal’s requirement to grant authority retoractively

A
  1. P must Have knowledge at the time of ratification of all material facts concerning the actions taken on its behalf
  2. Manifest assent by word or conduct that the purported agent’s previously unauthorized actions are now binding on the principal; and,
  3. P must have the requisite capacity to authorize the action at the time it is performed & at ratification.
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14
Q

Agent: Employee or Independent Contractor?

A

Employee: Employer controls or has the right to control the agent’s means and manner of performance.

Independent Contractor: Employer does not have the right to control how the agent performs services.

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15
Q

Agent’s duty of care to principal

A
  1. obey the principal’s instructions;
  2. perform any service within the scope of the agency with reasonable care;
  3. indemnify the principal against loss caused by the agent’s failure to act with reasonable care in the scope of the agency
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16
Q

Agent’s duty of loyalty to principal

A
  1. Prefer the interest of the principal over the agent or others when acting upon the principal’s behalf;
  2. avoid self-dealing; and
  3. neither compete with the principal nor usurp business opportunities belonging to the principal.
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17
Q

Actual express authority is the authority of the agent to

A

To do things that the principal has directly authorized through an express oral or written communication

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18
Q

Actual implied authority includes the authority of the agent to

A

To do things reasonably necessary to fulfill the broader responsibilities given to him by the principal

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19
Q

An agent’s actual authority can be

A

Express or Implied

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20
Q

Agent’s duty to principal

A
  1. Duty of Care

2. Duty of Loyalty

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21
Q

Duties owed by Principals to Agents

A
  1. Duty of Compensation

2. Duty of Reimbursement

22
Q

Duty of compensation

A

Even if the agency agreement does not explicitly provide compensation for the agent, the principal has a quasi-contractual duty to pay the agent the reasonable value of the services rendered. Restitution damages available.

23
Q

Duty of Reimbursement

A

The principal is obligated to reimburse the agent for: all reasonable expenses incurred in the scope of agency.

24
Q

The Power and Authority of Agents

A
  1. Power to Bind
25
Q

Agent’s Power to Bind

A

When an agent acts within the scope of her authority she has the power to bind the principal to contracts she enters into on the principals behalf

26
Q

Limit on agent’s power to bind

A

The agent has no power to bind beyond the actual authority express or implied granted to the agent by the agency’s relationship

27
Q

A principal ratifies the otherwise unauthorized acts of its agent by either

A
  1. Manifesting assent that the act will bind the principal;
  2. Performing conduct that is justifiable only by P’s consent to be bound; or,
  3. Accepts the benefits of the transaction.
28
Q

An employee acts within the scope of employment when

A
  1. performing tasks assigned by the employer; or
  2. engaging in a course of conduct subject to the employer’s control.

Slight Detours Okay

29
Q

An employee acts is not within the scope of employment when

A
  1. Occurs within an independent course of conduct done for the employee’s purposes only

Frolics are not okay

30
Q

What is an Agent’s Tort Liability to Third Parties

A

No magic shield for Agents
Agents will be liable to third parties for harm caused by their negligence or by their intentionally tortious conduct whether or not they are acting within the scope of the agency.

31
Q

An agent’s contractual liability turns on

A

Whether the principal is fully disclosed or undisclosed

32
Q

In general, if an agent enters into a contract on behalf of a principal that is fully disclosed:

A

The agent will not be personally liable on the contract

33
Q

In general, if an agent enters into a contract on behalf of a principal that is not fully disclosed:

A

The agent will be personally liable on the contract

34
Q

What is a Principal’s Contractual Liability to Third Parties?

A

Principals will be liable on contracts with third parties when their agents, acting with authority, enter into those contracts on their behalf. This is the main implication of an agent’s power to bind a principal.

35
Q

Principal’s Tort Liability: Liability for Principal’s Own Negligence w/ respect to agent

A

A principal is liable to a 3rd party for harm caused by negligence in (1) selecting; (2) training; (3) retaining; (4) supervising; or, (5) otherwise controlling the agent

36
Q

Under the doctrine of respondeat superior, vicarious liability generally attaches where

A

the principal has the right to control the agent (the agent is an employee) & the agent is within the scope of the agency

Strict Liability Doctrine
(due diligence is not a defense — does not matter how careful principal was)

37
Q

What is a fully disclosed principal

A

A fully disclosed principal is a principal whose existence and identity are known to the third party.

38
Q

Will employers be held liable for an employee’s intentional tort?

A

Generally no; unless, it occurs in the course of and for the purpose of accomplishing the employer’s work

(generally not a defense that the employer had previously instructed the employee not to use force)

39
Q

Will employer’s be held liable for independent contractors intentional tort?

A

No

40
Q

When does an agent have actual authority to act on behalf of principal?

A

When an agency relationship is created through the mutual consent of an agent and the principal

41
Q

When does the agent have apparent authority to act on behalf of a principal?

A 
When the mistaken principal's 
1. Words,
2. actions, or 
3. failure to act
causes a 3rd party to reasonably  but mistakenly believe that another acts as its authorized agent
42
Q

Apparent authority of an agent is created by

A

The principal’s conduct, not the agents

43
Q

Apparent authority will bind the principal to? And will not bind?

A
  1. Contracts

Generally not, torts

44
Q

The driver of a motor vehicle is assumed

A

to be operating as the vehicle owner’s agent

45
Q

What are a principal’s damages if their agent breaches their duty of loyalty

A

The principal is entitled to recover the profits made by the agent and third parties.

46
Q

When is a principal liable for the tortuous conduct of an independent contractor?

A

When the conduct is inherently dangerous.

47
Q

What is the difference between a partially disclosed principal and an undisclosed principal?

A

A partially disclosed principal is one whose existence is stipulated but identity is still unknown. Whereas there is no mention of an undisclosed principal.

48
Q

How can an agent escape personal liability for a contract entered into on behalf of a principal

A

The agent has to full disclose the existence and identity of the principal and make it clear that he is not a party to the contract.

49
Q

What is the effect of a “borrowed” employee

A

If an agent is borrowed from their primary master, the borrower who directs them will be liable as if their principal

50
Q

How to terminate an agency relationship?

A

The principal or agent must notify the other in a manner that reasonably indicates the relationship is being terminated.

51
Q

When may an agent delegate their authority to a subagent?

A
  1. When expressly given authority to; and,

2. In the case of emergency

N. C. Agency (1 decks)

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