Agency

Question 1

What is the two part test that must be satisfied for a principal to be found vicariously liable for torts committed by its agent?

Answer 1

There must be a

1) Principal and agent relationship and
2) the tort must have been committed by the agent within the scope of that relationship

Question 2

What is required to show a principal and agent relationship? THINK ABC

Answer 2

1) ASSENT - Informal agreement
2) BENEFIT - Must be for principals benefit
3) CONTROL - Principal has right to control agent having power to supervise manner of agent performance

Question 3

Is a principal vicariously liable for subagents?

Answer 3

Only liable for a subagent if there is ABC Assent, Benefit and Control. Typically there is never assent to subagent help and no right to control so no vicarious liability.

Question 4

Is a principal vicariously liable for borrowed agents?

Answer 4

Only liable for borrowed agents where there is ABC Assent, Benefit and Control. Typically there is assent and benefit but not control so no vicarious liability.

Question 5

Is a principal vicariously liable for independent contractors?

Answer 5

No right to control so no vicarious liability EXCEPT where they are conducting inherently dangerous activities or estoppel where they held out as agent so estopped from denying liability on that ground.

Question 6

What are the things to look for when deciding whether the tort committed by the agent has come within the scope of the relationship with the principal?

Answer 6

1) Conduct of a kind they were hired to perform
2) Tort occurred on the job (a mere detour is not outside scope)
3) Was there intent to benefit the principal by conduct?

Question 7

Are intentional torts included in the scope of vicarious liability?

Answer 7

Intentional torts are generally outside the scope EXCEPT where the principal authorized them, they naturally arise in nature of employment or the agent was motivated by a desire to serve the principal.

Question 8

When is the principal liable for contracts entered into by its agent?

Answer 8

Where the principal authorized the agent to enter into the contract.

Question 9

What are the four types of authority?

Answer 9

Actual express, Actual implied, Apparent and Ratification

Question 10

Describe what actual express authority is

Answer 10

Where principal used words to express authority to agent however if underlying authority of underlying contract is to be in writing, authority must be in writing.

Question 11

Explain what actual implied authority is

Answer 11

Authority which the principal gives the agent through conduct or circumstance. Necessity to accomplish expressly authorized task, custom implies it or prior dealings between P and A. Prior acquiescence.

Question 12

Explain what apparent authority is

Answer 12

A two part test, principal cloaked agent with the appearance of authority and third party reasonably relies on appearance of authority.

Question 13

Explain what ratification is

Answer 13

Authority can be granted after contract if principal has knowledge of ALL material facts regarding the contract, and principal accepts benefits

Question 14

Can ratification alter terms of contract?

Answer 14

NO

Question 15

What duties to agents owe to principals?

Answer 15

DOC, Duty to obey instructions, duty of loyalty

Question 16

Explain the agent’s duty of loyalty to principal

Answer 16

Agent may never, self deal, usurp the principal’s opportunity or make secret profits.

Question 17

What remedy does the principal have if the agent breaches DOC, duty to obey instructions or duty of loyalty?

Answer 17

Can recover losses caused by breach and also may disgorge profits.