Agency

Question 1

What is required for a possessor good to be able to transfer title without authority

Answer 1

(1) some indicia of ownership, OR

(2) be a dealer in the goods

Question 2

Actual authority arises out of the reasonable belief in ____ whereas apparent authority arises out of the reasonable belief in ______.

Answer 2

Agents; third parties

Question 3

Who must have contractural capacity to enter into a principal-agent relationship?

Answer 3

Only the principal

Question 4

Inherent Authority

Answer 4

Principal will still be held liable where general agent exceeds her actual authority but act performed is similar to act authorized

Few courts recognize

Question 5

Who can be bound to a K where principal’s identity is disclosed to 3rd party and agent had authority to enter into K?

Answer 5

Principal and, if parties intended the agent to be a party the contract, the agent

Question 6

Who can be bound to a K where principal gave agent authority and agent discloses that principal and agent exist but do not disclose principal’s identity>

Answer 6

Principal and the agent

Question 7

Who is liable when the prcinipal is undisclosed to the third party and the agent had authorization to enter into the K?

Answer 7

Principal and agent

Question 8

If principal negligently selects an incompetent independent contractor, what will principal be liable for?

Answer 8

Generally no b/c no right of control -only for principal’s own negligence in selection.

Exception:

• indept contractor doing inherently dangerous activity
• estoppel: if held out indept contractor with appearance of agency, estopped from denying liability

-Principal hired contractor with knowledge of incompetence

Question 9

Duty of principal to agent

Answer 9

(1) Duty to compensate agent reasoanbly for services (2) indemnify agent for all losses or expenses incurred in discharging autohrized duties,
(3) duty to cooperate
(4) other duties imposed in K

Question 10

Agency may not be unilaterally terminated by the principal where:

Answer 10

(1) agent has interest in subject matter of the agency

(2) power is given for security

Question 11

What can an agent with authority to sell personal property do?

Answer 11

(1) give general warranties for quality
(2) grant customary covenants
(3) accept payment in cash
(4) deliver possession of property upon payment

Question 12

Principal-agent relationship requires

Answer 12

(1) Assent (informal agreement between principal who has capacity and agent)
(2) Benefit (agent’s conduct must be for the principal’s benefit)
(3) Control (principal must have right to control the agent by having power to supervise a manner of its performance)

Question 13

Will principal be vicariously liable for sub-agent’s torts?

Answer 13

Only if there is also assent, benefit, and control

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

Question 14

Will principal who borrows another principal’s agent be vicariously liable for borrowed agent’s tort?

Answer 14

Generally no unless assent, benefit, control

Question 15

Liability of principal for agent

Answer 15

Factors:

(1) was conduct “of the kind” agent hired to perform (w/in job description)
(2) Did htee tort occur on the job? (frolic v. detour)
(3) Did agent intent to benefit principal?

• Intentional torts generally outside scope
• exceptions: (1) authorized by principal; (2) natural from nature of employment; (3) motivated by desire to serve principal

Question 16

Detour v. Frolic

Answer 16

Detour is a mere departure from an assigned task.

Frolic is a new and independent journey

Question 17

MEE: Liability of principal for K entered by agents

Answer 17

• Generally, principal liable for K entered into by agent only if principal authorized agent to enter into K
• If princiapl liable on authorized K, agent is not liable (exception: undisclosed principal -if principal partially disclosed or undisclosed authorized agent may still be liable)

Question 18

Actual Express Authoirty

Answer 18

• gen principal uses words to express authority to agent (can be oral and private) (is narrowly construed)
• exception: if K itself must be in writing, express authority must also be in writing
• can be revoked by unilateral act of principal or agent; or death or incapacity of principal (exception: give agent durable power of attny)

Question 19

Actual Implied Authority

Answer 19

• Authority which the principal gives the agent through conduct or circumstances
  (1) Necessity: tasks necessary to accomplish expressly authorized task
  (2) Custom: tasks which by custom are performed by persons with agent’s title or position
  (3) Prior acquiesence by princiapl: agent believes authorized based on prior acquiesence

Question 20

Apparent Authority

Answer 20

(1) princiapl cloaked agent with appearance of authority

(2) third party reasonably relies on appearance of authoirty

Question 21

Ratification

Answer 21

Authority can be granted after K entered, if:

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

Exception: ratification cannot alter terms of K

Question 22

Duties agent owes to principal

Answer 22

(1) Duty of care
(2) Duty to obey reasonable instructions
(3) Duty of loyalty (may never self-deal by receiving benefit to detriment of principal, usurp principal’s opportunity or secret profits -making profit at principal’s expense without disclosure)

-Remedy: recover losses caused by breach and may disgorge profits made by breaching