Agency generally and Liability of principal for torts of agent—respondeat superior or vicarious liability

Question 1

Three agency problems

Answer 1

I. Liability of principal to 3rd party for torts of an agent
II. Liability of principal to 3rd party for ks entered into by an agent
III. Duties which agents owe to principals

Question 2

Issue and 2 part test for liability of principal for torts of agent- respondeat superior or vicarious liability

Answer 2

A. Issue: whether the principal will be vicariously liable for torts committed by its agent
B. Two-part test: principal will be liable for torts committed by its agent if 1) there is a principal-agent relationship (ABC) and 2) the tort was committed by the agent within the scope of that relationship

a. Principal-agent relationship. – Assent- Benefit, Control
i. Requirements (need all three) “ABC”
1. Assent – informal agreement between principal who has capacity and the agent
2. Benefit—the 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
a. Sub-agents: Will the principal be vicariously liable if its agent gets the help of a sub-agent and the sub-agent commits the tort?
i. Principal will be liable for a sub-agent’s tort ONLY if there is “ABC”—assent, benefit and control b/w the principal and the sub-agent tortfeasors.
ii. Typically, the principal does NOT assent to the sub-agent’s help and doesn’t have the right to control the sub agent. Therefore, without all three, there is no vicarious liability for a sub-agent’s tort.
b. Borrowed agents: will a principal who borrows antoher principal’s agent be vicariously liable for the borrowed agent’s tort?
i. Principal will be liable for a borrowed agent’s tort only if there is “ABC” assent, benefit and control.
ii. Typically, although 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. Therefore, the original principal retains control. Without all three, there is no vicarious liability for a borrowed agent’s tort
4. Basically lots of situations with assent and benefit, but without control. So without right to control, cannot impute liability

Was something within the scope of the relationship: look to factors: 1) of the kind? 2) on the job? 3) A intent to benefit P?

i. Was conduct “of the kind” agent was hired to perform?
1. Was it within the job description
ii. Did the tort occur “on the job”?
Frolic v. detour Departures from the work (frolic v. detour) – a minior departure from the work does not take employee outside the scope of employment. Boss still vicariously liable. A major departure destroys vicarious liability.
iii. Did the agent intend to benefit the principal?
1. If the agent even in part intended to benefit the principal by its conduct, that’s enough to be inside the scope.

iv. Hypo: ER instructs EE to drive across town to deliver files to another office. On the way back, EE stops to pick up shirts at dry cleaner for work the next day. In parking lot of dry cleaner, EE hits a pedestrian. ER IS LIABLE—this was a frolic. Minor departure from work
is within scope.

Question 3

Agents vs. independent contractors

Answer 3

1. AS A RULE: no vicarious liability for independent contractor tort.
2. Except for inherently dangerous activities or estoppel
3. Key distinction between agent and independent contractor is that there’s o right to control independent contractor. Because there’s no power to supervise the manner of its performance
4. Vicarious liability rule for independent contractor torts
   a. There’s no vicarious liability for independent contractor’s tort.
5. Exceptions (2)
   a. Inherently dangerous activity exception – if your independent contractor commits a tort while doing an inherently dangerous activity, you will be vicariously liable
   i. This is strict liability. Even though you cannot control them, we’re going to impute liability.
   b. Estoppel—if you hold out your independent contractor with the appearance of agency, you will be estopped from denying vicarious liability
   i. For ex. if the company makes its independent contractors wear its uniform and that independent contractor causes harm,

Question 4

Intentional torts of agents

Answer 4

i. Rule: as a rule, intentional torts are generally outside the scope of the agency.
ii. Exceptions:
1. Conduct authorized by the principal; OR
2. Conduct was natural from the nature of employment; OR
a. Bouncers in bars, security guards.
3. Motivated by a desire to serve the principal

Question 5

Real estate broker ks

Answer 5

i. Nonexclusive ks—entitle agent to compensation upon production of a ready, willing and able buyer even if sale not consummated
ii. Exclusive contracts00 lets broker get commission if ANYONE produces a ready, willing and able buyer.