Agency (Mediums)

Question 1

Types of Agency Relationships

Answer 1

1. Universal Ag – has broad authority, authorized for ALL acts the Pr can perform.
2. General Ag – has authority to conduct a series of transactions over a period of time.
3. Special Ag – has limited authority either for a specific act/transaction OR a specified period of time.

Question 2

Termination of Agency Relationship

Answer 2

• An agency relationship terminates by:
  
  1. A manifestation by either party that the relationship is terminated;
  2. Expiration of a specified term of authority;
  3. Death of Pr or Ag (by operation of law); OR
  4. Incapacity of the Pr or Ag (by operation of law) – except if a durable power of attorney exists.
• Death of Pr:
  
  • Common Law: agency is terminated regardless of whether the third-party has notice of Pr’s death.
  • Some States; NOT terminated until the third-party has notice of the death.
• Agency Contracts – Pr can terminate the Ag at any time.
  
  • BUT, Pr may be liable for damages if Ag is terminated prior to the expiration of a contract (unless the Ag materially breached contract).

Question 3

Inherent Agency power

Answer 3

• Protects third-parties when dealing with Ag even if there is no actual or apparent authority.
• Two Groups of Inherent Agency Power:
  
  • First Group→Subjects an employer to liability when:
    
    1. an Ag acts in furtherance of employer’s business; AND
    2. his conduct harms a third-party.
  • Second Group→If an Ag violates the Pr’s orders and there is no actual/apparent authority, inherent agency applies when:
    
    1. An agency relationship exits; AND
    2. Ag engaged in acts that are generally of a kind that would fall within his actual authority, but for the violation of Pr’s instructions.

The concept of Inherent Agency Power was eliminated in the Restatement (Third) of Agency.

Question 4

Ratification

Answer 4

• Makes the Pr liable for an Ag’s contract entered into without authority.
• Ratification occurs when the Pr:
  
  1. Has knowledge of all material facts or contract terms; AND
  2. Assents (approves) to the same through words or conduct.

*Ag also remains liable if Pr was not disclosed.

• Rest. 2nd→Undisclosed Pr CANNOT ratify.
• Rest. 3rd→Undisclosed Pr CAN ratify.

Question 5

Liability if respondeat Superior Doctrine is Inapplicable

Answer 5

• A Pr/employer will be liable for an Ag’s acts outside the respondeat superior doctrine if:
  
  1. Principal intended the conduct / consequences;

b) Principal was negligent or reckless in selecting,

training, supervising, or controlling the agent;

c) It is a non-delegable duty; OR
d) Agent had apparent authority, the agent’s

actions taken with apparent authority constitute the tort (or enable it to be concealed), and the third-party reasonably relied on such authority.