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.
Does death automatically terminate an agent’s apparent authority?
No.
Name two (2) instances of inherent authority in which a principal will be liable.
(1) Respondeat superior, and
(2) Conduct similar to that authorized.
A principal will be held liable for the improper disposition of goods when one (1) of what two (2) things are present?
(1) Indicia of ownership, or
(2) The agent is a dealer in the goods.
What effect does ratification have?
It gives retroactive effect to the transaction and relieves the agent of liability.
What are the prerequisites for ratification?
The principal:
(1) Must know the material facts,
(2) Accept the entire transaction, and
(3) Must have capacity.
What are the methods of ratification?
(1) Express, or
2) Implied (accepting the benefits, silence, or the filing of a lawsuit
What parties are liable when the principal is disclosed?
The principal.
What parties are liable when the principal is unidentified or undisclosed?
The principal and the agent.
Are principals generally liable for the torts committed by independent contractors? What are the exceptions?
No.
(1) Inherently dangerous activities,
(2) Nondelegable duties, or
(3) The principal knowingly selected an incompetent independent contractor.
What factors are considered when determining if someone is an agent or an independent contractor?
(1) Right to control,
(2) Characterization of relationship by parties,
(3) Custom re: supervision,
(4) Skill required,
(5) Tools and facilities,
(6) Period of employment, and
(7) Basis of compensation (hour v. job).
Who is liable for the acts of borrowed employees?
Whichever principal has the primary right of control.
What is the difference between a frolic and a detour?
Frolic = major deviation, outside the scope of employment.
Detour = minor deviation, within the scope of employment.
When is a trip with two (2) purposes considered within the scope of employment?
When any substantial purpose of the employer is being served.
Is a principal liable for the intentional torts of his agent? What are the exceptions?
No.
(1) Force is authorized (ex. bouncer),
(2) Promotion of the employer’s business,
(3) Friction generated by employment (ex. bill collection), or
(4) When the principal’s apparent authority enables the agent to commit a tort or conceal its commission.
