Agency Flashcards
Creation of agency relationship
- Principal manifests assent to an Agent
- A acts on P’s behalf
- A’s actions are subject to P’s control, &
- A manifests assent or otherwise consents
A principal is liable to third parties for contracts of the agent if there is
Authority: actual )express or implied) or apparent Or Ratification.
A principal is liable for an agents torts if?
Within the scope of agency.
An agent can be liable as a party to a contract if:
The identity of the principal is not disclosed.
Agents have what duties?
Duty of care and lyoalty.
Principals have what duties?
Duty not to interfere and duty to indemnify A for losses in scope of agency.
Vicarious liability
A form of strict liability in which one person is liable for the tortious actions of another
A person is an employer if . . .
The person has the right to control the means & methods by which another performs a task or achieves a result
Employee
Person subject to employer’s control
—> absent a right to control, the person is likely an independent contractor
When is an employer liable for the tortious conduct of an employee?
When the conduct is within the scope of employment
Conduct within the scope of employment includes . . .
- Acts that the employee is employed to perform, or
2. Acts that were intended to benefit the employer
Effect of employer’s instructions for employee on employee’s subsequent tortious conduct
Careful instructions directed at employee do NOT insulate the employer from liability - even when employee acts counter to the instructions - IF the employee is acting within the scope of employment
When is a principal liable for a tort committed by an agent with apparent authority?
When the agent’s appearance of authority enables him to:
(A) commit a tort, OR
(B) conceal its commission
When does apparent authority exist
For apparent authority to exist:
- A third person believes that the agent acted with actual authority
- Such belief is reasonable, &
- Belief is traceable to a manifestation by the principal
What are the agency theories under which a principal could potentially be held liable for the acts of its agent?
- Vicarious liability (employer/employee)
- Actual authority (express or implied)
- Apparent authority
When can an agent bind a principal to a K with a third party?
An A has the power to bind the P to a K when the A acts with actual or apparent authority
Actual authority
Exists when the P makes a manifestation that causes the A to reasonably believe that the A is authorized to act on the P’s behalf
Apparent authority
Exists when a 3P reasonably relies on manifestations by P concerning the A’s authority to act on the P’s behalf
Undisclosed principal
A P is undisclosed if the 3P has no notice of the P’s existence
An A who enters into a K on behalf of an undisclosed P . . .
Becomes a party to the K
—> i.e. when A does not inform a 3P of the identity or the existence of the P, the A becomes liable to the 3P on the K
Partially disclosed principal
A P is partially disclosed if the 3P has notice of the P’s existence, but not the P’s identity
An A who enters into a K on behalf of a partially disclosed P . . .
Becomes party to the K (unless A & 3P agree otherwise)
—> i.e. A who discloses P’s existence, but not identity, becomes liable on K with 3P
Ratification (requirements)
4 requirements:
- P ratifies entire act/transaction
- P & 3P both have legal capacity to enter into K
- Ratification is timely (i.e. occurs before 3P withdraws from the K), &
- P knows the material facts of the transaction
Effect of P’s ratification of A’s act
P becomes liable to 3P for act A took to benefit P when P ratifies said act, even if A did not have actual or apparent authority to act
