Agency Flashcards
Agency Defined
Agency is a fiduciary relationship when one person, the P, manifests assent to another person, the A, that the agent shall act on the Ps behalf and be subject to the Ps control, and the A manifests assent or otherwise consents you the act.
Who is a person?
1) an individual
2) an organization
3) a govt with capacity to possess rights and incur obligations
Consequences of agency
1) duties arise b/w P and A
2) A has power to bind O and act on his behalf w/o P having to act personally but under P control.
3) liability imposed on P for A actions
4) knowledge of A imputed to P
Formation of Agency relationship
1) P grants authority to A to act for him
2) manifestation of P intention to grant authority (express, implied, verbal, or by conduct)
Elements of Agency relationship
1) both parties must assent
2) A must agree to act
3) A must under control of P
Compensation-not required but if compensated, comp primarily to advance interests of P.
Capacity-Agent
- minimum mental capacity required.
- minors ✔️
- incompetents ✔️
- A endowed with same capacity as P
- cannot be A to adverse parties unless fully advised and consent.
Capacity-Principal
- P capacity to effect own business=capacity to appoint A
- Incompetents❌
- Minors❌ except necessities
- Corporations-only matters w/in corporate powers
Proof of Agency relationship
1) relationship established by circumstantial evidence (including situation, words, actions)
2) Fact question for jury
3) burden on asserting party
4) proven by POE
5) not implied by family relationship
6) A may not testify about his conclusions on the matter
7) Stmts made outside of court by A inadmissible
8) Stmts made in absence of independent evidence of authority not competent admissions
Motor vehicle presumption
- Common Law: owner morning presumed liable
- Statutory: owner liable for negligence of person operating vehicle w/express or implied permission
-Presumption of agency rebutted owner can be held directly liable for own negligence in entrusting the car to unfit person
Types of P
Disclosed-notice A is acting for P and notice of identity
Undisclosed-no knowledge of existence or identity of P
Partially disclosed-P existence but not identity is disclosed
A liability for undisclosed/ partially disclosed P
A is personally liable for entering into a K for an undisclosed or partially disclosed P
A liability for disclosed P
A does not ordinarily incur personal liability for entering into a K with a disclosed P.
Authority of Agents
To do acts which are incidental to the transaction, that is, acts that are reasonably necessary to accomplish it.
Types of Agents
Special and General
General Agent
Employed by P to transact all of his business of a particular kind.
ex: a P may employ a salesman to sell his goods of a particular type
Authority of General Agent
to perform all things usual in the line of business, and cannot be limited by any private order or direction (secret instructions) unknown to the party dealing with them.
Special Agent
Employed by the P especially for one transaction
ex: a P may employ a real estate agent to sell Blackacre.
Authority of Special Agent
no authority to bind P beyond the terms of the specific authority conferred upon him by the agreement for employment.
Subagents
Persons entitled to do work for the original A. New agency relationship created. A becoming P to subagent.
subagent has same duties to P as the original A.
Breaches of duty by subagent will be imputed to A.
If subagent appointed without P authority, no agency relationship exists between P and SA.
Gratuitous Agent
Performs all the duties of an A without compensation.
Consideration not required for A relationship, parties can contractually agree to relationship.
Master/Employer as a P
Employs A to perform a service. Controls or has the right to control the conduct of the other in the performance of the service.
Servant/Employee as A
Employed by A to perform a service whose conduct in the performance of a service is controlled or subject to the right of control
Independent Contractors
IC contracts with another but is not controlled by the other or subject to the others right to control with respect to his physical conduct in the performance of the undertaking.
Independent Contractor as an A–factors
1) amount of control the P exerts over how A performs work
2) A is engaged in a distinct occupation or business
3) type of work A is doing is customarily done under supervision of P
4) Skill required in A occupation
5) Who supplies tools and place of performance
6) Length of time A is engaged by P
7) Whether A paid by hour or job
8) Whether the P is in business
Duties of P to A
Absent contrary agreement, P obligated to his A to:
1) compensate A for services for agreed amount or reasonable value of services
2) reimburse A for reasonable expenses incurred
3) Indemnify and exonerate A for any liability that results from non negligent and good faith performance of duties
4) cooperate with A in performance of duties
5) exercise due care toward A
Duty of Care of A to P
Absent contrary agreement, A obligated to
1) perform contract and render services w/reasonable care
2) obey P in all reasonable directions
3) act with care, competence, and diligence normally exercised by A in similar circumstances, or if higher skill level, then exercise that level
4) indemnify the P against loss caused by A wrongful behavior or fail to act w/ reasonable care.
Duty of Loyalty of A to P
Arises out of fiduciary character of relationship
Self-Dealing
A acting for own benefit.
A must prefer the interests of the P to his own or others in acting for the P.
Usurpation of Business Opportunity
A may not usurp business opportunity belonging to P.
Business opportunity is one so closely related to P business that it could be deemed incidental to that business.
EE can only take personal advantage of business opportunity only if the ER knows and consents
