Agency

Question 1

Agency question about P’s liability under K Law

Answer 1

This is an agency question in a contract setting.
Consent: The principal becomes liable to a 3rd party on a contract entered into by the agent if the agent and principal both consent,
Authority: and the agent has either actual or apparent authority to bind the principal.
Capacity: The principal must have contractual capacity, but the agent need not have that capacity (must have mental capacity).
Writing: Agency law does not require a writing to establish an agent-principal relationship, but a writing may be required by the SOF.
Consideration: Consideration not required.

Question 2

Actual Authority

Answer 2

Agent must have authority (or substitute) to bind principal.
Actual authority: created by P expressly telling agent to act on her behalf or impliedly when P leads A to believe that he has authority

Question 3

Substitutes for actual authority

Answer 3

Apparent authority, ratification, adoption

Question 4

Apparent authority

Answer 4

P leads/lets 3rd party to believe A has authority (can be mere silence when reasonable person would speak up and clarify)

Question 5

Ratification

Answer 5

A acts without authority, but P later validates act and becomes bound. RETROACTIVE
Requires:
P must have knowledge of all material facts
P must accept entire transaction
P must have contractual capacity
P must affirm (in writing or by actions)
P must be disclosed to 3rd party

Question 6

Creation of agency relationship

Answer 6

Need capacity (P’s contractual capacity) and consent (of both parties). A writing may be required by other law (like SOF).

Question 7

Agent’s Duties to Principal

Answer 7

Express contractual duties (if applicable)
Duty of loyalty
Duty of obedience
Duty of reasonable care

Question 8

Principal’s Duties to Agent

Answer 8

Express contractual duties (if applicable)
Reasonable compensation
Reimbursement for expenses

Question 9

Principal’s Remedies for A’s Breach

Answer 9

Contract remedies
Tort remedies
Constructive trust
Action for secret profits
Withhold compensation
Terminate agency

Question 10

Agent’s Remedies for P’s Breach

Answer 10

Contractual remedies

Possessory lien

Question 11

Termination of Actual Authority

Answer 11

Lapse of a specified or reasonable time
Happening of a specified event
Change in circumstances
Agent's breach of fiduciary duty
Either party's unilateral termination
Operation of law (loss of capacity, etc.)

Question 12

Irrevocable Agency

Answer 12

When agency entered into for A’s benefit and coupled with an interest/power given as a security

Question 13

3rd Party v P

Answer 13

P liable to 3rd party as long as A had authority to act

Question 14

3rd Party v A

Answer 14

If P disclosed (existence and identity known), P liable and A not liable (unless intended to be)
If P not disclosed, A and P liable

Question 15

3rd Party Liability

Answer 15

If P disclosed, only P can enforce K against 3rd party
If P not disclosed, either P or A can enforce (but benefits flow to P)
P cannot enforce if misrepresented or burden when P undisclosed

Question 16

P liable for A’s tort

Answer 16

This is an agency question arising in tort context. The issue is whether the tort was committed by a servant acting w/in the scope of employment. If so, the master & servant are jointly and severally liable to third party.

Question 17

Other theories of principal liability in tort (beyond respondent superior)

Answer 17

Direct liability: P’s negligence in hiring, retaining, or supervising A
Liability for A’s tort when gave actual authority to committed tort or ratified tort

Question 18

Employee vs Independent Contractor

Answer 18

Look to whether employer controlled manner, time of person’s work; look and see time period of employment, what skills are involved, how payment is made

Question 19

Scope of Employment

Answer 19

Was employee doing what they were hired to do?
Was it a during a detour (slight deviation) or frolic (big deviation from normal working tasks/times)
If close call, side with innocent 3rd party against employer

Intentional torts outside scope UNLES force used to further master’s business, master ratifies use, or master authorized intentional tort.

Question 20

P liable for independent contractor

Answer 20

Activity is inherently dangerous, or
Nondelegable duties have been delegated
Principal is negligent in selecting contractor

Question 21

P liable for tort b/c apparent authority

Answer 21

P vicariously liable where A appears to deal on behalf of P and A’s apparent authority enables A to commit a tort or conceal its commission.