Agency Flashcards

Question

Can express authority exist mistakenly or by misrepresentation?

Answer 1

Yes, express authority can exist where the principal mistakenly conveyed authority. The fact that the agent induced the principal to grant authority through misrepresentation does not affect the extent of the authority actually granted.

Answer 2

The authority the agent reasonably believes she has as a result of the principal's actions.

Answer 3

(1) Express authority to accomplish a particular result implies authority to use all means reasonably necessary to accomplish this. (2) An agent has implied authority to act in accord with custom and usage which they have actual knowledge of (3) Acquiescence by the principal reasonably leading agent to believe they had the authority to do the same acts in the future (4) Absent specific instructions, an agent has implied authority to take reasonably necessary measures until she can contact the principal.

Answer 4

In general, an agent's authority will not be construed to permit delegation of any authority (assuming that would not be consented to by the principal).

Answer 5

(1) An agent may employ a subagent to execute ministerial (purely mechanical) acts. (2) Circumstances may indicate that the delegation is necessary and authority to delegate will be implied. (3) If it is the custom of the particular business (4) If the principal has notice that the acts could not, by definition, be performed by the agent herself (impossibility), then there is implied consent to sub delegate.

Answer 6

The authority to pay for the goods (out of the principal's budget or on credit if funds unavailable) and to accept delivery

Answer 7

(1) to give general warranties respecting quantity and quality and the normal covenants in real property (2) Authority to deliver the goods (3) if the agent has possession, then she has the authority to collect payment * * an agent may not accept a check or extend credit. unless the agreement or implication indicates otherwise, she can only take cash

Answer 8

In accordance with the prudent investor standard. Further, an agent investing for the principal should take title to investments in the principal's name or clearly designate her position as the principal's agent

Answer 9

(1) Lapse of time -- specified in the contract, or within a reasonable time period (2) Happening on an agreed upon event (3) Change of circumstances causing an agent to realize the principal would no longer want her to exercise her authority (4) Breach of fiduciary duty by the agent (5) Unilateral declaration of termination by either party (6) By operation of law as a result of death or incapacity of either party

Answer 10

(1) destruction of the subject matter of the agent's authority (2) drastic change in business conditions (3) change in relevant laws (4) if relevant, insolvency of either party

Answer 11

A regular power of attorney terminates upon incapacity or death of the principal but a durable power of attorney does not terminate on incapacity of the principal. It terminates at death.

Answer 12

(1) An agency coupled with interest (the agent has been given immediately exercisable rights in the property) (2) A power given as a security (usually exercisable only on default)

Answer 13

Both types of irrevocable agency are treated as powers given as security and is absolutely irrevocable other than in accord with the agreement. Under the Restatement, the power must have been given in order to protect a debt, duty or title of the agent or third party and must be supported by consideration.

Answer 14

Apparent authority exists when the principal holds another outs as possessing authority and the third party reasonably believes that the authority exists.

Answer 15

The principal must have done (words or conduct) or failed to do something causing the other party's belief. The agent cannot bootstrap their own authority. v

Answer 16

(1) Agent has no actual authority at all – including impostors, lingering apparent authority (2) When an agent has some present actual authority (3) Inherent authority

Answer 17

When the principal negligently permits an impostor to be in a position to appear to have the authority to act for the principal.

Answer 18

If the principal knows of dealings between a past agent and a third party, he must give notice to the third party that the agent's actual authority is terminated. The agent's apparent authority will continue if the principal does not do this.

Answer 19

The agent's apparent authority will not be terminated with respect to third parties who see and rely on such a writing.

Answer 20

Restatement view: Death/incompetency does not automatically terminate apparent authority Traditional view: It does terminate apparent authority without notice to agent or third parties

Answer 21

When the principal has previously allowed the agent to act beyond her authority and the principal knows a third party is aware of this, the principal is bound by the agent's unauthorized act.

Answer 22

Apparent authority may be established through an agent's title or position if it creates a reasonable belief in the third party that the agent was authorized to act for the principal in a way typical of someone holding that position

Answer 23

A general agent is one authorized to engage in a series of transactions involving a continuity of service. A special agent is authority to engage in one or more transactions not showing a continuity of service and thus have more limited apparent authority.

Answer 24

When a principal secretly limits an agent's actual authority and the agent acts beyond the scope of this limitation in dealing with a third party, the principal will be bound.

Answer 25

Recognized by a few courts -- this is authority derived solely from the agency relationship. A principal will sometimes be bound to an innocent third party on a balance of interests rationale. E.g., respondeat superior attaches without regard to actual authority.

Answer 26

Generally, the fact that agent has possession of the principal's goods does not entitle them to sell or transfer it. They must have some indicia of ownership like a document of title or be a dealer in the goods to transfer good title.

Answer 27

Where the principal subsequently ratifies the unauthorized transaction

Answer 28

Ratification relieves the agent of liability for breach of duty to the principal.

Answer 29

If ratified, a transaction will be treated as if it had been originally entered into with authority (it relates back to the date of the transaction).

Answer 30

If the principal had capacity at the time of ratification but not at the time of the act, there will be no retroactive effect but the contract will be considered valid from the time of adoption. Ratification also does not have retroactive validity if it would operate to the prejudice of third parties who in the meantime acquired rights now in jeopardy

Answer 31

Ratification can only exist if the principal knows or reasonably should know of the material facts, and must ratify the entirety of the transaction. The principal must have capacity. No consideration is needed.

Answer 32

(1) Express affirmance (2) Implied affirmance by (a) accepting the benefits of the transaction if possible to decline them; (b) staying silent where there would be a duty to disaffirm; (c) bringing a lawsuit involving the transaction

Answer 33

As a general rule anything that the principal could have legally done or authorized at the time of the transaction. Exceptions: (1) where performance of the contract would be illegal at the time of ratification; (2) the third party withdraws; (3) there has been a material change in circumstances making inequitable to bind the third party

Answer 34

Under the majority rule, only the principal. In most states an undisclosed principal cannot ratify a contract. The restatement allows ratification by an undisclosed principal to be effective.

Answer 35

If the agent had authority.

Answer 36

Whether the principal was disclosed, unknown, or undisclosed.

Answer 37

A disclosed principal is one whose existence and identity are known to the third party. A disclosed principal is always liable on a contract entered into by an authorized agent. A third party generally has no action against the agent.

Answer 38

(1) Where the intent of the parties is that the agent shall be a party to the contract. (2) Where the agent acted without authority, they may be liable to the third party on the contract for breach of an implied warranty of authority.

Answer 39

An unidentified principal is one whose existence, but not identity, is known to the third party. An undisclosed principal is one whose existence and identity are unknown to the third party. Both the agent and principal are liable for contracts entered into by an authorized agent.

Answer 40

Both the agent and the principal. Upon objection of either defendant, the third party must elect prior to judgment which to hold liable.

Answer 41

Only the principal.

Answer 42

Either the principal or the agent. But if the agent enforces it, the principal remains entitled to all the rights and benefits.

Answer 43

(1) Where the agent has fraudulently concealed the principal's identity. Most courts require there to have been an affirmative misrepresentation. The third party can get rescission. (2) Where performance by the principal would impose an undue burden on the third party (by virtue of the fact it is the principal and not the agent to whom performance must be made), the contract may not be specifically enforced and the third party has a right to rescission. [example: a requirements contract where the principal's requirement are substantially greater than the agent's]

Answer 44

(1) Respondeat superior | (2) Apparent authority

Answer 45

A principal may be liable for the torts of her agent if: (1) there is an employer-employee relationship, and (2) the wrongful conduct must have been committed within the scope of the employer-employee relationship

Answer 46

Where the elements of respondeat superior aren't met, a principal may still be vicariously liable in certain instances where the agent acted with apparent authority. A principal may also be held directly likable if she gave the agent actual authority to commit the tort, or ratified it, or for her own negligence in hiring, retaining, or supervising the agent.

Answer 47

It is derivative of the agent's liability (though personal defenses of the agent not going to liability do not bar recovery against the principal). It is joint and several (victim may recover in full from either).

Answer 48

Generally not liable for torts of an agent functioning as an independent contractor (not an employee/servant).

Answer 49

An independent contractor is one who is hired to do a particular job, paid a given amount, and follows her own discretion in carrying it out without a right to control the manner and method by the principal. An employer has the right to control the manner and method of how an employee does their job. The clearest example of an employee is one who works full time for the employer, is compensated on a time basis,, and is supervised in the details of their work.

Answer 50

Whether the principal has the right to control the manner and method by which the person performs their tasks.

Answer 51

(1) The way the parties characterize their relationship (2) An agent with a distinct business/occupation of their own is more likely to be an IC (3) the custom in the locality with regard to whether that type is usually performed under supervision (4) the greater the degree of skill required, the more likely to be an IC (5) who supplies the tools and facilities (6) The shorter and/or more definite the employment period, the more likely to be an IC (7) Compensation on the basis of time is more likely to be an employee but on the basis of a job is more likely to be an IC (8) A contract giving the principal the right to control is conclusive (9) Someone hired to do an act not in furtherance of the principal's own business is more likely an independent contractor

Answer 52

A principal may be liable for the acts of a duly authorized subservient. A subservient is duly authorized where the person hiring them had authority to do so. Bar exam analysis should focus on the existence/absence of this authority.

Answer 53

Where the principal creates the appearance that an employer-employee relationship exists where it does not, and a third person relies on this, the principal may not deny the existence of the relationship and may be held liable under respondeat superior

Answer 54

It depends on whether the borrowing principal or the loaning principal had the primary right of control. Usually the employee remains under the right of control of the loaning principal. If the borrowing principal directs the employee's tortious acts, they will be liable.

Answer 55

(1) Where the acts to be performed by the independent contractor are of an inherently dangerous nature (2) Where the principal knowingly hires an incompetent independent contractor, they will be liable for the contractor's negligence. (If the selection of an incompetent IC was merely negligent itself, the liability will be direct for negligent hiring.) (3) Where the principal has a nondelegable duty to act (landowner's duty to keep land safe for business invitees, e.g.)

Answer 56

(1) Whether the conduct was of the same general nature as, or incident to, that which the employee was employed to perform (2) Whether the conduct was substantially removed from authorized time and space limits of the employment (3) Whether the conduct was actuated at least in part by a purpose to serve the employer

Answer 57

No, and the fact that an act was forbidden in some way does not automatically remove it from the scope of employment.

Answer 58

(1) Express authorization (2) Implied from circumstances like (a) an emergency making it reasonably necessary to hire someone to protect the principal's interests or (b) a direct order to the agent in which hiring a subservant is a reasonable means of accomplishing the principal's desire result

Answer 59

A small, minor deviation from the employer's directions (usually within scope)

Answer 60

A major deviation from the employer's directions (usually outside scope). This includes instances where an employee engages in their own personal affairs at work in a manner constituting a substantial departure from employment

Answer 61

Not on its own (still must have occurred within scope of employment)

Answer 62

It raises a rebuttable presumption that they were not acting in the scope of employment

Answer 63

Proof of return

Answer 64

Generally it is outside the scope of the relationship unless expressly authorized by the employer. The employer is also not liable for a passenger's injuries where the passenger was a trespasser.

Answer 65

Usually no. The gauge of this is whether the instrument used creates a greater risk of harm.

Answer 66

This is usually a question of whether any substantial purpose of the employer's is being served

Answer 67

Generally no, because they are deemed outside of the scope of employment, except where they are a natural incident of the employer's business or a benefit runs to the employer.

Answer 68

(1) Torts occurring as a natural incident of a job requiring/authorizing the use of force (e.g., bouncer) (2) A tort arising from the employee's intentional choice of a wrongful means of promoting the business (3) Torts resulting from friction inherent in the business (e.g., debt collection) (4) The intentional misrepresentations of the agent where the agent had authority to make them (5) the employer ratified the tortious act (the same rules apply as in contracts, with particular attention to knowledge of all material facts)

Answer 69

Even absent respondeat superior's required elements, the principal is liable where an agent appears to deal or communicate on their behalf and that apparent authority enables the agent to (1) commit a tort or (2) conceal its commission. There must therefore be a close link between the tort and the apparent authority.