Agency Law Flashcards
What is the most common way to create an agency relationship?
By appointment (oral or written)
Many states require the appointment to be in writing for interests in property.
What are the four elements required to create an agency relationship?
- Principal manifests assent to the agent
- Agent acts for the benefit of the principal
- Agent’s actions are under the principal’s control
- Agent assents
What defines an employer/employee agency relationship?
The principal has the right to control and does control the physical conduct of the agent.
What must an individual have to enter into an agency relationship?
Legal capacity and not be a minor.
Can a corporation be a principal in an agency relationship?
Yes, but it must have legal existence.
Who can serve as agents of a corporation?
- Corporate offices
- Employees
- Other persons
What is an independent contractor?
An agent who is not an employee and is not subject to the principal’s control regarding physical conduct.
What is a subagent?
An individual appointed by an agent to perform functions on behalf of a principal.
What are the ways to terminate an agency relationship?
- Revocation
- Change in circumstances
- Passage of time
- Principal’s death (when agent knows)
- Agent’s death (automatically)
- Principal’s loss of capacity
- Statute
What types of authority can an agent have?
- Actual authority
- Apparent authority
- Principal is estopped from denying the agent’s authority
What is express authority?
Authority created via oral or written words, clear language, or specific detailed terms.
What is implied actual authority?
Authority that permits the agent to take actions necessary to achieve the principal’s objectives.
What is the difference between implied authority and apparent authority?
- Implied authority: Principal’s words or actions cause agent to believe they have authority
- Apparent authority: Principal causes third party to reasonably believe agent has authority
What is apparent authority?
Created by the reasonable reliance of a third party on the authority granted to the agent by the principal.
What must exist for a principal to ratify an agent’s contract?
- Principal must ratify the entire act
- Principal must have legal capacity at the time of transaction
- Ratification must be timely
- Principal must have knowledge of material facts
What is the liability of an agent when the principal is disclosed?
An agent does not become a party to the contract.
What happens when an agent acts on behalf of a partially disclosed principal?
The agent will be a party to the contract.
What is the agent’s liability when the principal is undisclosed?
The agent becomes a party to the contract and is liable to the third party.
Under what doctrine may a principal be vicariously liable for an agent’s tort?
Doctrine of respondeat superior.
What conditions allow a principal to be vicariously liable for an agent’s intentional tort?
- Tort committed within the space/time of employment
- Agent motivated by benefit to principal
- Act was of the kind the agent was hired to perform
What is a frolic in the context of employment?
A significant deviation from the purposes of work.
What is a detour in the context of employment?
A minimal departure from the workday that may still be within the scope of employment.
What are exceptions to a principal’s vicarious liability for acts of independent contractors?
- Principal retains control over the task
- Principal hired IC for a non-delegable duty
- IC has apparent authority
- Principal is negligent in selection/training/supervision
What are the fiduciary duties owed by the agent to the principal?
- Duty of loyalty
- Duty of care
- Duty of obedience
- Duty to provide information
- Duty not to usurp business opportunities
- Duty not to disclose confidential information
- Duty not to self-deal
What is the duty of care in the context of agency?
Perform with reasonable care, competence, and diligence as a reasonable person would.
What is the duty to provide information?
To give information the principal wants or requests.
