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Bar Studying - Non-MBE Subjects > Agency > Flashcards

Agency Flashcards

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1
Q

A principal is liable for the torts of an agent if

A

(1) there is a principal-agent relationship

(2) the tort was committed by the agent within the scope of that relationship

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2
Q

The requirements of a principal-agent relationship are

A

(1) Assent
(2) Benefit
(3) Control

**The ABCs of the principal-agent relationship. An agent ASSENTS to the CONTROL of a principal for the principal’s BENEFIT.

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3
Q

The “assent” requirement of the principal-agent relationship test is satisfied by

A

an agreement between the principal and agent.

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4
Q

The “benefit” requirement of the principal-agent relationship test is satisfied if

A

the agent’s conduct must be for the principal’s benefit.

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5
Q

The “control” requirement of the principal-agent relationship test is satisfied if

A

the principal must have the right to control the agent by having the power to supervise the manner of its performance.

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6
Q

A principal is vicariously liable for torts committed by a sub-agent only if

A

there is assent, benefit, and control between the sub-agent and the principal.

**Typically the principal does not assent to the sub-agent’s help or have the right to control.

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7
Q

A principal who borrows another principal’s agent is vicariously liable for the borrowed agent’s tort only if

A

there is assent, benefit, and control between the borrowed agent and the principal.

**The borrowing principal almost never has CONTROL over the borrowing agent.

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8
Q

If the right to control is missing, the relationship is likely that of

A

independent contractor.

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9
Q

There is no right to ______ an independent contractor

A

control.

There is no power to supervise the manner of their performance.

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10
Q

Generally, there (is/is no) vicarious liability for torts by an independent contractor.

A

is no.

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11
Q

There is vicarious liability for torts by an independent contractor for

A

(1) inherently dangerous activities; or

(2) estoppel if the principal holds out the independent contractor as an agent

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12
Q

Factors to consider when determining whether the tort was committed within the scope of the agency relationship are

A

(1) JOB DESCRIPTION; (2) ON THE JOB; (3) BENEFIT THE PRINCIPAL

(1) whether the conduct was of the kind the agent was hired to perform, i.e. inside the job description; or
(2) whether the conduct occurred on the job (MOST IMPORTANT); or
(3) the agent, even in part, intended to benefit the principal by its conduct

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13
Q

Frolic and detour is relevant to the ______ factor of the agency relationship.

A

“on the job”

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14
Q

A frolic is a

A

NEW and INDEPENDENT JOURNEY. NO vicarious liability.

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15
Q

A detour is a

A

MERE DEPARTURE from an assigned task. Vicarious liability still attaches.

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16
Q

A principal is liable for its _____ torts within the ______ of agency.

A

agent’s; scope.

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17
Q

Generally, a principal (is/is not) vicariously liable for intentional torts committed by its agent.

A

is not.

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18
Q

Intentional torts are generally _________ of the agency relationship.

A

outside the scope.

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19
Q

An intentional tort is within the scope of agency and the principal is vicariously liable for the intentional torts of its agent in any one of the following situations:

A

(1) AUTHORIZATION; (2) NATURAL; (3) DESIRE

(1) the principal authorized the intentional tort; or
(2) the conduct was natural from the nature of employment (e.g. a bouncer); or
(3) motivated by a desire to serve the principal

20
Q

A principal is liable for contracts entered into by its agent only if the principal _______ the agent to enter into the contract.

A

authorized.

21
Q

The four types of “authority” by which a principal can authorize an agent to enter a contract are

A

(1) actual express
(2) actual implied
(3) apparent
(4) ratification

22
Q

Actual express authority arises when

A

the principal uses words to authorize the agent to enter into the contract.

23
Q

Actual express authority need not be overt or written, but can be

A

oral and even private.

**Watch out for statute of frauds exception.

24
Q

If the underlying contract itself must be in writing, then express authority must

A

also be in writing.

E.g. if Statute of Frauds applies to the underlying K, the express authority must also be in writing.

25
Q

Express authority will be revoked by

A

(1) unilateral act of either the principal or agent; or

(2) death or incapacity of the principal

26
Q

A principal is liable on its _______ contracts.

A

authorized

27
Q

The death or incapacity of the principal _______ “express authority” unless there is

A

terminates; a durable power of attorney.

28
Q

A durable power of attorney is a

A

written expression of authority to enter into a transaction that contains clear survival language.

29
Q

Actual express authority is _____ construed.

A

narrowly.

30
Q

Actual implied authority arises when

A

there is conduct or circumstances that give rise to authority.

31
Q

Actual implied authority typically arises in the following three ways:

A

(1) necessity
(2) custom
(3) prior acquiescence by the principal

32
Q

Actual implied authority will arise through “necessity” when the implied authority is necessary

A

to accomplish an expressly authorized task.

33
Q

Actual implied authority will arise through “custom” for all tasks which by custom are

A

performed by person’s with the agent’s title or position.

34
Q

Actual implied authority will arise through “prior acquiescence by the principal” for all tasks which

A

the agent believes to be authorized to do from prior acquiescence by the principal.

35
Q

Apparent authority arises when

A

(1) PRINCIPAL CLOAKED; (2) REASONABLE RELIANCE

(1) the principal “cloaked” the agent with the appearance of authority; and
(2) the third party reasonably relied on the appearance of authority.

36
Q

A principal “cloaks” an agent with the appearance of authority when

A

the principal does SOMETHING to give the agent the appearance of authority.

37
Q

A principal can “ratify” a previously-entered into contract if

A

(1) the principal has knowledge of all material facts regarding the K; and
(2) the principal accepts the benefits.

**The principal cannot not alter the K’s terms. If alternation is attempted, there is no ratification.

38
Q

Ratification _____ alter the terms of the contract.

A

cannot.

39
Q

An ______ agent is not liable on its _____ contracts.

A

authorized; authorized.

40
Q

If a principal is partially disclosed or fully undisclosed, an authorized agent may nonetheless be _________ at the ______ of the third party.

A

liable; election.

  • *Involves some concealment of the identity of the principal
  • **The principal can be liable too if the third-party so elects.
41
Q

All agents owe principals the following three duties:

A

(1) duty of care
(2) duty to obey reasonable instructions
(3) duty of loyalty**

**Most important on the exam.

42
Q

Under the duty of loyalty, an agent may not

A

(1) self-deal (receive a benefit to the detriment of the principal)
(2) usurp the principal’s opportunity
(3) secret profits (undisclosed profits)

43
Q

An agent engages in self-dealing by

A

receiving a benefit to the detriment of the principal.

44
Q

Remedies: If an agent breaches a duty to the principal, the principal may

A

(1) recover losses that are caused by the agent’s breach; and
(2) disgorge profits made by a breaching agent.

45
Q

In order to form an agency relationship, the _________ must have the capacity to contract.

A

principal. The agent need not have that capacity.

46
Q

An agency relationship may not be terminated unilaterally by the principal where

A

the agent has an interest in the subject matter of the agency.

47
Q

A principal owes an agent a duty to

A

reasonably compensate her for services rendered.

Bar Studying - Non-MBE Subjects (9 decks)

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