Agency Flashcards
What is the Doctrine of Respondeat Superior or Vicarious Liability?
Principal will be liable for torts committed by its agent if: (1) there is a principal-agent relationship, and (2) the tort was committed by the agent within the scope of that relationship.
What is required for a principal-agent relationship to exist?
(1) Assent - an informed agreement btw the principal (who has capacity) and the agent;
(2) Benefit - agent’s conduct must be for the principal’s benefit;
(3) Control - the principal must have the right to control the agent by having the power to supervise the manner of the agent’s performance.
What is required for sub-agents to have a principal-agent relationship?
Sub-agents, must satisfy same 3 elements (assent, benefit, control), but typically the principal doesn’t assent to the sub-agent’s help and doesn’t have the right to control the sub-agent.
What is required for borrowed agents to have a principal-agent relationship?
Must satisfy 3 elements. While typically the borrowing principal may assent to, and benefit from, the borrowed agent, the borrowing principal does not assume any right to control the borrowed agent.
Do independent contractors fall under the principal-agent relationship? Can there be vicarious liability for an independent contractor’s torts?
Typically no, because there is no right to control an independent contractor because there is no power to supervise the manner of its performance.
Therefore, generally, there can be no vicarious liability for an independent contractor’s torts. But there are EXCEPTIONS:
- Ultra hazardous activities - IC engages in a dangerous activity
- Estoppel - Principal holds out IC w/ appearance that its an agent then can’t deny vicarious liability.
What are the factors relating to the scope of the principal-agent relationship?
(1) Was the conduct “of the kind” agent was hired to perform? Within job description? (2) Did the tort occur “on the job?” Frolic v. Detour. Frolic = new and independent journey, outside scope; Detour = a mere departure from an assigned task, within the scope (3) Did the agent intend to benefit the principal?
Can a principal be held liable for the intentional torts committed by the agent? Are there exceptions?
Generally, intentional torts committed by the agent is considered conduct outside the scope (e.g. assault, battery). However, there are three exceptions. Exceptions: (1) Authorized by the principal; or (2) Natural from the nature of employment (e.g. bouncer at a bar); or (3) Motivated by the desire to serve the principal
What is the general rule regarding a principal’s liability for contracts entered by agents?
Principal is liable for contracts entered into by its agent only if the principal authorized the agent to enter the contract. If the principal is liable for authorized contracts, then the authorized agent is not liable.
What are the types of authority a principal can give an agent for purposes of entering into contracts?
Actual authority, actual implied authority, apparent authority
What is actual express authority? Is the authority revocable?
Principal used words to express authority; can be oral and even private, unless it must be in writing to satisfy the statute of frauds (e.g. land contracts); narrowly construed/tailored to words used in authorization. Revocable unless made durable.
How may actual express authority be revoked?
It can be revoked by: (1) Unilateral act of either the principal or the agent, OR (2) Death or incapacity of the principal (but note if principal gives the agent durable power of authority, which requires conspicuous and survival language).
What is actual implied authority?
Authority which the principal gives the agent through conduct or circumstance; (1) necessity (2) custom (3) prior acquiescence/ dealings by the principal.
What is apparent authority?
Principal “cloaked” agent with the appearance of authority and third party reasonably relies on appearance of authority.
Explain ratification.
Authority can be granted after the contract has been entered if the principal has knowledge (or have reason to know) of all material facts regarding the contract, and the principal accepts its benefits. The principal must also have capacity – that is be competent and of legal age at the time the contract was made.
Ratification can be express OR implied through the conduct of the principal;
BUT ratification CANNOT ALTER the terms of the contract in VA.
What is the Undisclosed Principal Rule? Can an agent be held liable?
This rule is an exception to liability. Authorizied agents are not liable unless the prinicipal is undisclosed. If principal is partially disclosed (only the identity of the principal concealed) or undisclosed (fact of principal concealed), authorized agent may nonetheless be liable at the election of the third party.
