Agency

Question 1

General Agent

Answer 1

Business manager, access to checking, sign contracts, enter into leases, pay bills

Question 2

Special Agent

Answer 2

e.g. real estate agent, limited in time or job

Question 3

Power of Attorney

Answer 3

“formal authority” - Another name for an agency relationship, either general or special

Question 4

Independent Contractors

Answer 4

Act on your behalf, don’t work for you constantly; e.g your lawyer (has some authority)

Question 5

Agency Relationship examples

Answer 5

Real estate agents

employees

Question 6

General Requirements

Answer 6

1. In writing, only if agent’s contracts must be in writing

2. Capacity of the principal - person hiring agent MUST have capacity

Question 7

NOT required

Answer 7

1. Capacity of the agent
2. Consideration - can be a gratuitous agency (college alum represents university in litigation, working with donor, etc.)

Question 8

Express agency relationship

Answer 8

Includes implied authority
- whatever is customary
e.g. apartment manager- duties, responsibilities
EXPRESS = IMPLIED AS WELL (whatever is necessary, customary, even if not specifically listed)

Question 9

Apparent Authority (Ostensible) ESTOPPEL

Answer 9

• Position
• Lingering _______ _________; actual, constructive (public)
• **Looks like someone is your agent and you continue to allow them to look like they are your agent, then they can bind you and hold you liable to 3rd parties - Brothers contractors e.g. custom vs. not custom homes - same offices, contract templates, etc.

Question 10

Ratification

Answer 10

a) retroactive (accepting all of terms, no authority but allowing it)*
b) full knowledge
c) accepts or fails to reject
* Real estate agent, instead of selling, found a renter and wrote up lease agreement

Question 11

Duties of Agent

Answer 11

1. Follow instructions, NOT allowed to exceed authority

2. Fiduciary; meaning you have to act in the best interest of principal

Question 12

Duties of Principal

Answer 12

1. Laibilty for payment on contracts
2. Compensation - unless gratuitous
3. Reimbursement - expenses
4. Indemnification - Pay them if they have to pay on contracts

Question 13

Termination

Answer 13

1. Agreement - automatic date, or accomplishment of task
2. Unilateral Act - (express/implied authority) - NOT always apparent; ***YOURE fired/I QUIT
3. Operation of Law - (Express/Implied & Apparent) - ***Death agent or principal, insanity, bankruptcy, breach of fiduciary duty

Question 14

Contract Liability of Disclosed Principal (actual authority)

Answer 14

1. Agent has ACTUAL authority (express or implied)

2. Liability lies btwn the principal and 3rd party; when agent discloses identidy/existense of principal

Question 15

Contract Liability of Disclosed Principal (apparent authority)

Answer 15

1. Agent has APPARENT authority
2. Liability still lies between 3rd party and principal BUT
3. IDEMNIFICATION - agent is going to have to idemnify the principalfor what has been done, because they do have contractual liabilty to that 3rd party

Question 16

Contract Liability of Disclosed Principal (no actual or appartent authority)

Answer 16

1. Agent has NO actual or apparent authority
   e. g. bookkeeper makes major investment
2. The agent is EXCLUSIVELY liable to the third party

Question 17

Contract Liability of UN-disclosed or PARTIALLY disclosed Principal (within actual authority)

Answer 17

1. Contract within ACTUAL authority
   e. g. major developer buying tract of land can drive up price
2. Because IN actual authority, the PRINCIPAL is liable to 3rd party, HOWEVER the AGENT is ALSO liable to 3rd party
3. AGENT has the right to indemnification/reimbursement from principal

Question 18

Contract Liability of UN-disclosed or PARTIALLY disclosed Principal (outside authority)

Answer 18

1. Contract outside authority (actual, ecpress/implied)
   e. g. buys two tracts of land instead of one
2. The AGENT is RESPONSIBLE to the third party

Question 19

Tort Laibility of Agents/Principals

Answer 19

• Depends on nature of the agent
• Master/servant (employees most common)
• independent contractor (hired auditor, on site, less likely to be held liable for these torts
• *boils down to degree of control principal has over agent

Question 20

Master/Servant

Answer 20

TWO PARTS

1. Doctrine of Respondent Superior (Vicarious Liability); “let the masteranswer for the torts of the agent” - principal liable;
2. HAS to be a tort committed in the scope of employment versus frolic and detour
   * *WHEN not authorized, principal not liable EXCEPT WHEN THERE IS:
   - negligent hiring
   - negligent supervision
   - implicit approval (bouncers- classic e.g.)

Question 21

IF frolic and detour

Answer 21

e. g. delivery man stops at girlfriends house, gets in accident
- PRINCIPAL not liable unless ongoing behavior and implicit approval by allowing them to do what they did (co. not screening emplyees, no supervision, implicit approval - nabisco cookie guy e.g. of aggressive behavior)

Question 22

Negligence facts

Answer 22

• ALWAYS liable for own negligence

- CONTRIBUTORY negligence is an absolute defense