Agency Flashcards
Agents
Do things on behalf of principal
principal
directs agent’s actions
Benefits of Agency
- extend P’s business dealings
- acquire agent’s expertise
- earn a living (agent)
P’s liability
- can be liable to 3P for the act of it’s agent
- bound by K/may have to pay in tort
- P bound by K when the P authorized the agent to enter into the K (A acted with legal authority)
3 components of agency
- Assent- manifestation (formal letter, spoken words, physical actions) from A to P and P to A
- Benefit- A agrees to act for P’s benefit
- Control- A agrees to act subject to the P’s control
- no requirement of consideration*
- dont need to say in this relationship*
- no writing requirement*
Who can be principal
- almost any person or entity that has legal capacity
- excludes: minors, incapacitated by drugs or alcohol, or illness
- entities: employer, LLC, LLP
- CANNOT: unincorporated association (lacks legal capacity)
Who can be agent
- any person or entity who has minimal capacity (assent, perform tasks, and be sub to control)
- minor can
- any type of business entity
Types of Agents
depends on degree of control
Servants/Employees
- highest level of control
- P has right to control A’s physical conduct
- P can also be “master”
- has the control or right to control A’s physical conduct a (manner and means) of A’s performance of work
Independent Contractors/Non-employee agent
- P exerts minimal control over A
- P does not have the right to control the As physical conduct at work
- ICs= high level of independence, free to work for other Ps, paid on a fixed fee on the completion of work, bring own tools
- P is not liable for IC’s actions
Termination
-either can terminate an agency relationship unilaterally
4 types of legal authority
- actual express
- actual implied
- apparent
- ratification
Actual Express Authority
- communication is between principal and agent
- P creates actual express authority by using words, written or spoken, to convey authority to the agent
- Subject intent: A must believe that he is doing what the P wants
- Obj intent: A’s belief must be reasonable
- Term: death or lack of capacity of P/ upon death of A/ P’s revocation
Actual Implied Authority
- communication= between P and A
- P creates with words, written or spoken, or by conduct that conveys authority to A to take whatever action necessary to achieve P’s obe
- A has actual implied to act within accepted business custom or general trade usage
- most common
Apparent Authority
- communication is between P and the 3P
- P creates by words, written or spoken, that cause the 3P to reasonably believe that the P consents to have acts done on the P’s behalf by A
Ratification
- P’s actions after the A has acted
- Requires: (1) P have actual knowledge of material facts about the K and (2) P then accept the K’s benefits
Principal Is disclosed
3P knows: (1) A is acting for the P and (2) P’s identity
Principal is Partially Disclosed
3P knows the A is working on behalf of P, but not the identity of P
-parties to the K = 3P, P, and A
Principal is undisclosed
- 3P does not know the A is acting for the P and does not know P’s identity
- 3P does not even know there is a P/A relationship
- Parties to the K = 3P and A NOT P
Respondeat Superior
- P may be liable for tortious acts of A
- Requirements:
(1) P has sufficient control over A’s conduct such that the A relationship is employer/ employee AND
(2) the tort was committed by the A while acting within the scope of the A relationship
Respondeat Sup- IC Exceptions
- task is inherently dangerous
- P is negligent in hiring IC
- P retains a certain amount of control and the tort occurs within controlled tasks
then may be liable for IC’s actions via vicarious liability
Frolic
-a significant deviation from an assigned path
Detour
-a de minimis deviation from an assigned path
Intentional Torts
- not generally within scope of employment
- Exceptions:
1) Conduct occurred within the space and time limits of employment
2) A was motivated in some part to benefit P
3) Act is of a kind that the A was hired to perform
Fiduciary Duties All A owe to P
Duty to:
- exercise reasonable care
- obey reasonable instructions
- duty of loyalty
Duty of Loyalty
-A cannot usurp business opportunities
-A cannot take in secret profits
-A cannot compete with P
P can sue for these
