Agency Flashcards

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1
Q

Capacity Requirements for Agency Relationship

A

Principal: contractual capacity
Agent: minimal capacity

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2
Q

Formalities of Creating an Agency Relationship

A

1) Capacity
2) Consent
3) Writing **

Not:
Consideration
** Writing (unless under SOF)

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3
Q

Methods of Creating an Agency Relationship

A
Act of Parties
   - Agreement
   - Holding out by principal (apparent authority)
   - Ratification
Operation of Law
   - Estoppel
   - Statute
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4
Q

Agent’s Duties

A

Express duties, fiduciary duties of loyalty, obedience to lawful instructions, and reasonable care

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5
Q

Principal’s Remedies Against Agent

A

Contract actions, tort actions, actions for secret profits, equitable actions, and withholding of compensation for intentional torts or intentional breach of duties

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6
Q

Principal’s Duties

A

Duties imposed by contract, reasonable compensation, and reimbursement for expenses

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7
Q

Agent’s Remedies

A

Contract remedies with a duty to mitigate

Possessory lien for any money due

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8
Q

Actual Authority

A

Authority that agent reasonably believes he possesses based on principal’s dealings with her

Express: contained in four corners of agreement
Implied: agent’s reasonable belief as result of principal’s actions

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9
Q

Termination of Actual Authority

A
Lapse of specified or reasonable time
The happening of specific event
A change in circumstance
Agent's breach of fiduciary duty 
Either party's unilateral termination
Operation of law
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10
Q

Irrevocable Agencies

A

An agency coupled with an interest may not be unilaterally terminated

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11
Q

Apparent Authority

A

Arises from reasonable belief of third party where principal directly or indirectly holds out another as possessing certain authority

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12
Q

Types of Apparent Authority

A
When Agent Has No Actual Authority 
   - Imposter
   - Lingering Apparent Authority (should provide notice)
When Agent Exceeds Actual Authority 
   - Prior Act 
   - Position
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13
Q

Inherent Authority

A

When court wishes to protect third parties

  • Respondeat superior
  • Conduct similar to that authorized
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14
Q

Ratification

A

agency relationship is created when “agent” purports to act on behalf of “principal” without authority, but principal later validates the act and becomes bound retroactively

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15
Q

Prerequisites for Ratification

A
  • Principal must know or have reason to know material facts
  • Accept the entire transaction
  • Have capacity
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16
Q

Methods of Ratification

A
  • acceptance of transaction’s benefits
  • silence if there is a duty to disaffirm
  • suing on transaction
17
Q

What May Be Ratified

A

Anything unless:

  • performance was illegal
  • third party has withdrawn
  • material change in circumstances
18
Q

Liability of the Parties: Third Party vs. Principal

A

Principal will be liable to the third party on a contract entered into by her agent if the agent had valid authority to act (actual, apparent, by ratification)

19
Q

Liability of the Parties: Third Party vs. Agent

A
Disclosed Principal (existence and identity known to third party)
- A disclosed principal is always liable on the contract and the agent is generally not liable (except if agent was intended to be liable or implied warranty)

Undisclosed Principal
- Liability for both the principal and agent

20
Q

Liability of the Parties: Third Party Liability

A

Disclosed Principal
- Only principal may enforce

Unidentified/Undisclosed Principal
- Either agent or principal may enforce

Principal may not enforce if there has been affirmative fraudulent misrepresentation of principal’s identity