Agency Flashcards
Define agency.
The relationship that arises when one person (the principal) manifests assent that another person (the agent) shall act on her behalf and her her control, and the agent consents to so act.
What is the capacity required for a principal?
Contracting capacity.
What is the capacity required for an agent?
Minimal capacity (i.e. minors and incompetents may be appointed as agents).
Is consideration required to create an agency relationship?
No.
Is a writing required to create an agency relationship?
No, unless otherwise provided by statute.
What are the three (3) ways an agency may be created?
(1) By act of the parties,
(2) Estoppel, or
(3) By statute.
What three (3) duties does an agent owe to a principal?
(1) Loyalty (no self-dealing),
(2) Obedience,
(3) Reasonable care (including a duty to notify), and
(4) Any duties imposed by the contract.
What are a principal’s remedies?
(1) Contractual remedies against compensated agents,
(2) Tort remedies,
(3) Actions for secret profits,
(4) Constructive trust,
(5) Withholding of compensation,
(6) Termination of agency.
What duties does a principal owe to an agent?
(1) Compensation,
(2) Reimbursement,
(3) Any duties imposed by the contract, and
(4) Cooperation.
What are an agent’s remedies?
(1) Contractual remedies, or
(2) Possessory lien.
Remember: Agents have a duty to mitigate.
Define actual authority, including the subtypes.
Actual authority is the authority the agent reasonable believes she possess based on the principal’s dealings with her.
Express: that which is actually contained in the four corners of the agency agreement.
Implied: that which the agent reasonably believes she has a result of the principal’s actions.
From what scenarios can an agent gain implied authority?
(1) Incidental to express authority,
(2) Arising out of custom known to the agent,
(3) From prior acquiescence,
(4) Emergency/necessity,
(5) To delegate authority,
(6) To pay for an accept delivery of goods,
(7) To give general warranties, and
(8) To manage investments.
When does an agency terminate?
(1) Lapse of a specified or reasonable time,
(2) The happening of a specified event,
(3) A change in circumstances,
(4) Agent’s breach of fiduciary duty,
(5) Either party’s unilateral termination, or
(6) By operation of law.
When are agencies irrevocable?
When an agency is coupled with an interest or the agent’s power was given as a security.
Define apparent authority.
Where the principal “holds out” another as possessing certain authority, thereby inducing others reasonably to believe that authority exists, the agent has apparent authority to act, even though as between herself and the principal such authority has not been granted.