Agency

Question 1

Agency

Answer 1

An agency relationship is formed by mutual agreement that the agent will act for the benefit of, and under control of the principal. Agents acting with authority have the power to bind the principal to a 3rd party. Agents also have fiduciary duties of care, loyalty, and obedience. Here,

Question 2

Mutual Agreement

Answer 2

No formal written agreement is required (unless SOF). Principal must have full contractual capacity. Agent needs only have minimal capacity. No consideration is required to serve as an agent. Here,

Question 3

Authority

Answer 3

A principal will be bound under a contract if the agent has actual authority (express/implied) or apparent authority. An agent will be bound if the principal’s existence and identity are undisclosed. An agent’s unauthorized acts may be later ratified by the principal. Here,

Question 4

Actual Authority

Answer 4

Agent’s authority is granted orally or in writing (express), or the agent reasonably believe the principal has given him authority because of necessity, custom, or prior dealings (implied)

Termination of actual authority occurs by either party’s unilateral termination, lapse of time, death of principal, occurrence of specific event, agent’s breach of duty, et. Here,

Question 5

Apparent Authority (3rd Party)

Answer 5

Apparent authority is when the principal “holds out” another with the appearance of authority AND a third party reasonably believes authority exists. Apparent authority may be established by a n agent’s title or position, or it can linger rom past dealings. This doctrine is designed to protect innocent 3rd parties who reasonably rely on a principal holding out a person as an agent with authority.

Question 6

Ratification

Answer 6

Even when an agent acts without authority, the principal will still be bound if he subsequently validates the act. Principal must have knowledge of all material facts and ratify the entire transaction (no partial). Ratification may be express or implied through the conduct of the principal. Here,

Question 7

Duty of Care

Answer 7

An agent owes a duty to carry out the agency act as a prudent person would under similar circumstances. Here,

Question 8

Duty of Loyalty

Answer 8

An agent owes a duty of undivided loyalty to the principal. This includes a duty to avoid self-dealing, a duty to disclose. Here,

Question 9

Duty of Obedience

Answer 9

An agent owes a duty to obey all reasonable direction of his principal. While the principal will be liable for the agent’s actions, the agent will be liable to the principal for any loss suffered due to not following the principal’s instructions. Here,

Question 10

Respondeat Superior

Answer 10

An employer is responsible for the tortious acts of their employees if the tort was committed within the scope of their employment. A minor deviation (detour) from the employers directions is usually within the cope of employment, but a substantial deviation (frolic) is not with within the scope. Employers are usually not responsible for the intentional torts of their employees unless their job duties includes the use of force (like a bouncer) Here,

Question 11

Independent Contractor

Answer 11

An independent contractor is a person who is NOT under the control of another as to the manner and methods used to accomplish a specified task. Generally, the principal is not liable for the acts of an independent contractor unless 1) the contractor was engaged in an inherently dangerous activity, or 2) the duty now non-delegable by the principal. Here,