Agency

Question 1

Two part test for liability for torts of agents

Answer 1

(1) principle/agent relationship
(2) tort was committed by the agent within the scope of the relationship: (i) was it in job description; (ii) intended to benefit principal

Question 2

Principle agent (ABC)

Answer 2

(1) assent (agreement with principal having capacity and agent)
(2) benefit (agent’s conduct is for principal’s benefit)
(3) control (P must have right to control the agent by having power to supervise the manner of agent’s performance)

Question 3

Will principal be vicariously liable for sub-agent’s or borrowed agents?

Answer 3

If there is ABC (assent, benefit, control)

Question 4

Distinction between agent and independent contractor

Answer 4

No right to control an independent contractor b/c no power to supervise manner

Question 5

Vicarious liability for independent contractors

Answer 5

(1) no vicarious liability
(2) exceptions: (i) inherently dangerous activities; (ii) estoppel (holding out independent contractor with appearance of agency

Question 6

Frolic

Answer 6

new and independent journey

Question 7

Detour

Answer 7

Departure from assigned task

Question 8

Intentional torts

Answer 8

(1) generally outside scope of agency
(2) exceptions: (i) authorized by principal; (ii) natural from nature of employment; (iii) motivated by desire to serve principle

Question 9

Contractual liability for contracts of agents

Answer 9

Principal is liable for contracts entered into by its agent if the principal authorized the agent to enter the contract

Question 10

For types of contractual authorization

Answer 10

(1) actual express authority: if contract must be in writing, authorization must be in writing; revoked by unilateral act of principal or agent or death of principal
(2) actual implied authority: (i) necessity (necessary to accomplish expressly authorized task); (ii) custom; (iii) prior dealings between principal and the agent
(3) apparent authority: (i) principal cloaked agent with appearance of authority; (ii) third party reasonably relies on appearance of authority
(4) ratification: (i) principal has knowledge of all material facts regarding the contract; (ii) principal accepts its benefits; (iii) ratification cannot alter the terms of the contract

Question 11

Are agents liable on contracts

Answer 11

(1) generally not liable on authorized contracts

(2) exception: undisclosed principal

Question 12

Duties of agent to principal

Answer 12

(1) duty of care
(2) duty to obey instructions that are reasonable
(3) duty of loyalty: (i) self-dealing; (ii) usurping principal’s opportunity; (iii) secret profits

Question 13

Remedies against agent breaching duty

Answer 13

(1) recover losses caused by breach

(2) disgorge profits made by breaching agent