Agency Law Flashcards
Components of an Agency Relationship
Assent - both parties manifest assent
Benefit - agent agrees to work for the principal’s benefit
Control- agent agrees to work subject to control of the principal
Who can be a principal?
Almost any person or entity with legal capacity
Excludes minors, mentally ill, intoxicated
Who can be an agent?
Any person with minimal capacity
a minor CAN be an agent
Because we want minors to be able to get a job
Servant/Employee
Types of Agents
Employer has right to control the agent’s physical conduct of work
MORE CONTROL + MORE LIABILITY
Independent Contractors
Types of Agents
Principal does not control or have the right to control the agent’s physical conduct of work
LESS CONTROL + LESS LIABILITY
Characteristics of an Independent Contractor
- High level of independence
- Free to work for other people
- Paid on a fixed fee
- Typically owns their own tools
Who can terminate an agency relationship?
Either party can terminate unilaterally
When is a principal bound by contracts entered into by an agent on their behalf?
- Principal authorized the agent to enter into the contract AND
- The agent acted with legal authority
Four Types of Authority
- Actual Express
- Actual Implied
- Apparent
- Ratification
Actual Express Authority
Principal creates actual express authority by using writen or spoken words to convey authority to the agent.
Look to communication between agent and principal
Intent required for Actual Express Authority
Subjective intent: Agent must believe that he is doing what the principal wants
AND
Objective intent: The belief must be objectively reasonable
Termination by death of Actual Express Authority
Death of Principal: terminates when agent has actual knowledge of principal’s death
Death of Agent: terminates immediately
Actual Implied Authority
Principal creates implied authority via written or spoken words OR other conduct to convey authority to agent to take whatever necessary steps to acheieve principal’s objectives.
Look to communication between principal and agent
Must act within accepted buisness customs or general trade usage
Apparent Authority
Principal creates authority via written or spoken words that cause a third party to reasonably believe the principal consents to have acts done on his behalf by the agent
Look to communication between third party and principal
Ratification
Requires that principal has:
* knowledge of the amterial terms of the contract AND
* Accepts the benefits of the contract
NO pre-act communication
Types of Disclosure
Disclosed: Third party knows the agent is acting on behalf of an identified principal. (Contracts are between third party and principal).
Partially Disclosed: Third party knows the agent is acting on behalf of someone, but not identified. (Contracts are between third party, agent, and principal.
Undisclosed: Third party is unaware of the agent’s status nor the principal’s idenitity. (Contracts are between agent and third party).
Vicarious liability/respondeat superior
And requirements
Principal may be laible for the tortious acts of his agent IF:
* Principal has sufficient control over the agent’s conduct such that the agency relationship is employer/employee AND
* The tort committed by the agent was committed while the agent was acting within the scope of his employment.
Sufficient Control
Principal controls or has right to control the physical conduct (manner and means) of the agent’s performance of work.
When can an independent contractor create liability for his principal?
in tort
- The task is inherently dangerous
- Principal was negligent in hiring
- Principal retains control over certain tasks and tort occurs within those tasks
Scope of Employment Factors
- Did agent intend to benefit the principal?
- Was the agent’s conduct of the kind the agent was hired to perform?
- Did the tort occur “on the job?”
Frolic
A significant deviation from an assigned path; is outside scope of employment
Detour
A diminimus deviation from an assigned path; within scope of employment
When may a principal be liable for the intentional tort of his agent?
- The conduct occured within the general space and time limits of employment
- The agent was motivated in some part to benefit the principal AND
- The act is of a kind that the agent was hired to perform
Duties of an agent
- Duty to exercise reasonable care
- Duty to obey reasonable instructions
- Duty of loyalty
