Agency

Question 1

Kansas is among the few states that have a broad equal dignities statute. So if an agent is to enter into a K on behalf of a principal that is within the statute of frauds, the agent’s authority must be in what form? and why?

Answer 1

The agent’s authority must be set out in writing sufficient to satisfy the statute and signed by the principal .

Question 2

In Kansas, does an attorney, acting for a client have implied authority to obligate the client for services directly connected to the representation?

Answer 2

Yes. Implied authority.

Question 3

Can an employer or principal be held liable for punitive damages based on the acts of employee or agent?

Answer 3

Yes, only if the act was authorized or ratified by the employer or principal.

Question 4

When a principal creates the appearance of an employer-employee relationship upon which a 3rd party relies, under what rule will the principal be liable?

Answer 4

The principal will be estopped from denying the relationship and will be liable under the doctrine of respondeat superior.

Question 5

To establish a retaliatory discharge claim for whistleblowing, an employee must provide CLEAR AND CONVINCING evidence that would lead a reasonably prudent person to conclude that: ___

Answer 5

1. the employee’s co-worker or employer engaged in some wrongful activity pertaining to public health, safety and the general welfare,
2. the employee reported the wrongful activity to company management or law enforcement in good faith
3. the employer knew that the employee reported such an activity prior to being discharged and
4. the employee was discharged in retaliation for making the report .

Question 6

Is contractual capacity necessary to enter into an agency relationship?

Answer 6

Only the principal needs contractual capacity.

Question 7

What kind of authority is created when a principal holds another out as his agent to a 3rd party?

Answer 7

Apparent authority

Question 8

Implied actual authority is the authority:

Answer 8

An agent believes she has based on her communications and relationship with the principal.

Question 9

The duty to indemnify is a duty owed by ____ to ______

Answer 9

The duty to indemnify is a duty owed by a principal to an agent.

Question 10

What are the three major duties of an agent implied by law

Answer 10

Loyalty, obedience, and reasonable care.

Question 11

What is a subagent?

Answer 11

A subagent is a person appointed by the agent to perform functions assigned to the agent by the principal.

Question 12

If the agent exercises diligence and good faith in appointing the subagent, is he still liable for breaches by the subagent?

Answer 12

Yes, agent will still be liable to the principal for breaches of the subagent.

Question 13

Does the subagent owe a duty to the principal if he was appointed without authority?

Answer 13

No, the agent alone will be responsible to the principal for the performance of the agency duties and for any loss sustained because of the subagent’s conduct. The agent can try to sue the subagent though.

Question 14

What duties does the principal owe the agent?

Answer 14

1. Compensation
2. Cooperation
3. Indmenity/reimbursement
4. express contractual duties

Question 15

What are the two types of agency relationships that may not be unilaterally terminated by the principal? (or (generally) by operation of law)

Answer 15

1. the agent has an interest in the subject matter of the agency
2. a power is given for security

Question 16

Apparent authority arises out of :

Actual authority arises out of:

Answer 16

1. the reasonable belief of 3rd parties.

2. the reasonable belief of agents.

Question 17

Is a principal bound by negligently allowing an imposter to act as an agent?

Answer 17

Yes.

Question 18

Is a principal bound where they have previously allowed an agent to act beyond her authority and the principal knows that the 3rd party is aware of this fact?

Answer 18

Yes.

Question 19

Will a principal be bound where an agent performs customary responsibilities in complying with the principal’s wishes without the actual authority to perform those tasks?

Answer 19

Yes.

Question 20

Will a principal be bound where the principal sets limits on an agent’s authority and a third party knows of those limits?

Answer 20

No.

Question 21

If someone, other than the principal, asserts their authority to act, is the principal bound by their actions, even if a 3rd party believes the statement to be true?

Answer 21

No. An agent cannot bootstrap her own authority, the principal must have done or failed to do something that causes the 3rd party’s belief.

Question 22

Can an agent with authority to sell personal property give general warranties for quality?

Answer 22

Yes.

Question 23

Can an agent with authority to sell real property grant the customary covenants?

Answer 23

Yes

Question 24

Can an agent accept a check or extend credit as payment for property sold?

Answer 24

No cash only.

Question 25

What is the single overriding factor in determining whether a person is an employee ?

Answer 25

Whether the principal (the employer) has the right to control the manner and method by which the person performs his tasks.

Question 26

Does a principal have a duty to compensate an agent?

What about a subagent?

Answer 26

1. Yes duty to compensate an agent reasonably for her services unless the agent has agreed to act gratuitously.
2. A principal has no duty to compensate a subagent even if the agent was authorized to hire subagents, unless the principal agrees otherwise.

Question 27

What is needed to establish a principal’s liability under the doctrine of respondeat superior?

Answer 27

1. an employer-employee relationship and

2. conduct within the scope of employment.

Question 28

Define:

1. Detour

2. Frolic

Answer 28

1. Detour is a small deviation from the employer’s direction and is within the scope of employment.
2. Frolic is an independent journey requiring a substantial departure from employment and is beyond the scope.

Question 29

What is considered the “scope” for agency relationship

Answer 29

If the nature of the employee/agent’s conduct is similar or incidental to that which is authorized, the conduct is probably within the scope.

Question 30

If a principal tells a 3rd party that a person is the principal’s agent and has the power to contract on the principal’s behalf, but the person doesn’t know she has this power, what kind of authority is present?

Answer 30

Apparent authority to contract for the principal because the 3rd party reasonably believes that the person has such authority.
Remember, belief of agents = actual authority
belief of 3rd parties = apparent authority

Question 31

What kind of authority exists in the situation where a principal gives a secret limiting instruction and the agent, when dealing with a 3rd party, acts beyond the scope of the limitation?

Answer 31

Apparent authority

Question 32

For the possessor of goods to be able to transfer good title without authority, she must have either ___

Answer 32

1) some indicia of ownership (like title)
2. or be a dealer in the goods.
NOTE: while being a dealer in the goods makes you a merchant, one may also be a merchant without being a dealer in the goods so make sure you use the right term.

Question 33

Recognized in some jurisdictions: where a general agent exceeds her actual authority, but the act performed is similar to the act authorized, will the principal be held liable? And what kind of authority is this called?

Answer 33

Yes, the principal will be held liable.

Example of inherent authority.

Question 34

Does ratification require consideration?

Answer 34

No, it is a unilateral act.

Question 35

The agent’s liability depends on what?

Answer 35

Whether the principal was disclosed.

Question 36

If a principal is disclosed, who is liable?

Answer 36

The principal. Agent is NOT liable UNLESS the parties contract intended this.

Question 37

If a principal is unidentified or undisclosed, who has liability?

Answer 37

liability for both the principal and the agent.
Most courts allow a 3rd party to file suit against either but upon objection by one of them, the 3rd party must elect which one to hold liable.