Agency Essays

Question 1

When can an agent bind the principal to a contract?

Answer 1

An agent has the power to bind the principal to a contract when the agent acts with actual or apparent authority

Question 2

Implied Authority

Answer 2

Actual authority exists when the principal makes a manifestation that causes the agent to reasonably believe that the agent is authorized to act on the principal’s behalf

Question 3

Actual Authority

Answer 3

Actual authority exists when the principal expressly gives the agent the authority to take a particular action

Question 4

Apparent Authority

Answer 4

Apparent authority exists when a third party reasonably relies on manifestations by the principal concerning the agent’s authority to act on the principal’s behalf

Question 5

What is an undisclosed principal?

Answer 5

A principal is undisclosed if the third party has no notice of the principal’s existence

Question 6

Are agents bound to contracts entered into by undisclosed principals?

Answer 6

An agent who enters into a contract on behalf of an undisclosed principal becomes a party to the contract

Question 7

What is a partially disclosed princial?

Answer 7

A principal is partially disclosed if the third party has notice of the principal’s existence but not the principal’s identity

Question 8

Are agents bound to a contract for a partially disclosed principal?

Answer 8

Yes, the agent becomes a party to a contract for a partially disclosed principal

Question 9

Ratification

Answer 9

A principal can ratify a contract that the agent executed on the principal’s behalf without authority.

4 requirements:

(1) Principal must ratify the entire contract;
(2) The principal and the third party must have legal capacity to enter into the contract;
(3) The ratification must occur before the third party withdraws from the contract; and
(4) The principal must know the material facts of the transaction.

Question 10

Vicarious Liability

Answer 10

The doctrine of vicarious liability asserts that a principal is liable for the acts of an agent, even though the principal is innocent of fault not directly guilty of any tort or crime.

Question 11

Respondeat Superior

Answer 11

The principal may be vicariously liable under respondeat superior for a tort committed by an agent acting within the scope of employment.

The principal will be liable despite the absence of tortious conduct by the principal.

An employee acts within the scope of employment when either performing the work assigned by the employer, or engaging in a course of conduct subject to the employer’s control.

When an employee acts independently of any intent to serve any purpose of the employer, the employer may escape liability.

Question 12

Is an agent a party to a contract when the principal is disclosed?

Answer 12

No.

Question 13

Election of remedies doctrine

Answer 13

For undisclosed or partially disclosed principals, once the third party discovers the existence of the principal, the election of remedies doctrine requires the third party to choose to hold liable either the principal or the agent.