Agency

Question 1

When will a principal be liable for the torts of an agent?

Answer 1

Two Part Test:

1. There is an principal-agent relationship, AND
2. Tort was committed within the scope of agency

Question 2

Elements of a principal-agent relationship

Answer 2

1. Assent (Informal Agreement)
2. Benefit (for Principal)
3. Control (Supervise manner of Agent’s performance)

Question 3

Liability for Torts of Sub-Agents

Answer 3

Need assent, benefit, and control b/w sub-agent and principal

Generally, there is no assent and no ability to control sub-agent and NO LIABILITY.

Question 4

Distinction b/w Agent and Independent Contractor

Answer 4

Rule: No vicarious liability for torts of ICs.

No right to control or supervise manner of performance- generally no liability.

Question 5

Exceptions: When a principal is liable for the torts of an Ind. Contractor

Answer 5

1. ULtra-hazardous or inherently dangerous activities

2. Estoppel: If P holds out an appearance of agency, P will be estopped from denying vicarious liability

Question 6

Scope of Agency

Answer 6

To determine within scope of agency, weigh the following factors:

1. Was it the kind of work (job description)?
2. Did it occur “on the job?” (frolic v. detour)
3. Did the agent intend to benefit the principal?

Question 7

Is a principal liable for the Intentional torts of agents?

Answer 7

General Rule: No V.C. for intentional torts

Exceptions:

1. Conduct was AUTHORIZED by P; or
2. Conduct was in the NATURE of employment; or
3. Conduct was motivated by a desire to SERVE P

Question 8

Is a Principal liable for the contracts entered into by agents?

Answer 8

General Rule: A principal is liable for AUTHORIZED contracts.

Therefore, AGENT is liable for unauthorized contracts (exception- undisclosed principal)

Question 9

Four types of Authority

Answer 9

1. Actual express authority
2. Actual Implied Authority
3. Apparent Authority
4. Ratification

Question 10

Actual Express Authority

Answer 10

May be private, oral, written

— Nuance (authority must match K- if K requires writing, so too must authority)

Can REVOKE express authority by:

1. Unilateral act of either P or A, OR
2. Death or incapacity of P (unless durable power of attorney)

*NARROWLY Construed

Question 11

Actual Implied Authority

Answer 11

Authority given through CONDUCT or CIRCUMSTANCE

There is implied authority when there is:

1. Necessity (implied authority to do all tasks necessary for express task),
2. Custom: customary for title
3. Prior acquiescence of principal

Question 12

Apparent Authority

Answer 12

Two part test:

1. Principal cloaked agent with appearance of authority, AND
2. third party reasonably relied on that appearance of authority

Question 13

Ratification

Answer 13

Rule: A principal gives authority by ratifying conduct once it has happened, IF:

1. P has knowledge of all material facts regarding K, AND
2. P accepts the benefits of K

Exception: ratification cannot ALTER terms of K

Question 14

Duties owed by AGENTS

Answer 14

1. Duty of Care
2. Duty to obey reasonable instructions
3. Duty of Loyalty

Question 15

Agent’s Duty of Loyalty

Answer 15

Agents have a duty of loyalty and therefore cannot engage in:

1. Self-dealing (receive benefit to P’s detriment)
2. Usurping P’s opportunity
3. Secret Profits: profiting at P’s expense without disclosure