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July 2023 MEE > Agency MEE > Flashcards

Agency MEE Flashcards

1
Q

Agency Relationship

A

Fiduciary relationship that arises when the principal appoints agent to act on the principal’s behalf and agent consents

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2
Q

Agency Elements

A

(1) Appointment
(2) Consent
(3) On behalf of
(4) Control

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3
Q

Capacity Requirements

A

Principal - contractual capacity
Agent - minimal capacity

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4
Q

Disqualifications

A

(A) for representing both parties
(B) for failing to have a required license

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5
Q

Equal Dignities Rule

A

Requires an agency relationship be in writing when the agent is to enter into certain contracts within the Staute of Frauds

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6
Q

Modes of Creation Agency Relationship

A

(1) By Acts of Parties
(2) By Operation of Law

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7
Q

Operation of Law for Creation of Agency

A

(1) Estoppel
(2) Statute

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8
Q

Agency by Statute

A

Statutes creating agencies are usually designed to accomplish a limited purpose

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9
Q

Agency by Estoppel

A

Virtually the same as apparent authority in that it requires third party reliance on principal’s communication

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10
Q

Agents Duties to Principal

A

(1) Duty of Care
(2) Duty of Loyalty
(3) Duty of Obedience

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11
Q

Subagent

A

Person appointed by an agent to perform functions that the agent has consented to perform on behalf of the agent’s principal

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12
Q

Duties if Subagent If Authorized

A

If the principal authorized the agent to appoint the subagent, the subagent owes the principal the same duties as the agent owes the principal

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13
Q

Duties if Subagent Was Not Authorized

A

If the agent was not authorized to appoint a subagent, the subagent does not owe duties to the principal but does owe duties to the agent

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14
Q

Principals Duties to Agent

A

(1) All duties imposed by their contract
(2) Reasonable Compensation
(3) Reimbursement for expenses

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15
Q

When May a Principal be Bound

A

An agent has the power to bind the principal to a contract only if the agent acted with authority

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16
Q

Three Types of Authority

A

(1) Actual
(2) Apparent
(3) Ratified

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17
Q

Actual Authority

A

Authority that the agent reasonably believes they possess based on the principals dealings with them

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18
Q

Express Actual Authority

A

Authority conveyed by the principal in words (oral or written)

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19
Q

Implied Actual Authority

A

Authority the agent reasonably believes they have as a result of the principals words or actions

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20
Q

Implied Actual Authority Includes

A

(1) Incidental to express authority
(2) Arising out of custom known to the agent
(3) Resulting from prior acquiescence by principal
(4) To take emergency measurements
(5) To delegate authority in cases of ministerial acts, where circumstances require, where performance is impossible without delegation, or where delegation is customary
(6) To pay for and accept delivery of goods
(7) To give general warranties
(8) To manage investments

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21
Q

Termination or Revocation of Actual Authority

A

(1) happening of an event
(2) lapse of reasonable time
(3) change in circumstances
(4) agents breach of fiduciary duty
(5) either parties unilateral termination
(6) operation of law

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22
Q

Irrevocable Agencies

A

Neither an agency couple with an interest nor a power given as security may be unilaterally terminated by the principal if the agency was given to protect the agent’s rights and is supported by consideration

23
Q

Apparent Authority

A

exists when the principal “holds out” another as possessing authority and based on this holding out, a third party is reasonably led to believe that authority exists

24
Q

Apparent Authority Types

A

(1) When Agent Exceeds Actual Authority
(2) When Agent Has No Actual Authority

25
Q

Apparent Authority - Agent Exceeds Prior Act

A

where principal previously permitted the agent to exceed their express or implied authority and knows that the 3rd party is aware of this

26
Q

Apparent Authority - Power of Position

A

when the agent is in a position that customarily carries with it certain responsibilities, the principal is liable for the agents acts that come within these customary responsibilities

27
Q

Apparent Authority - Imposters

A

where the principal negligently permits an imposter to be in a position to appear to have agency authority, the principal will be held liable for the imposters actions undertaken with such authority

28
Q

Apparent Authority - Lingering

A

apparent authority can linger after actual authority ends

29
Q

Inherent Authority

A

derived solely from the agency relationship and results in the principal being bound even though the agent had no actual or apparent authority to perform a particular act

30
Q

Types of Inherent Authority

A

(1) Respondeat Superior
(2) Conduct Similar to Authorized

31
Q

Ratification

A

created when an agent purports to act on behalf of a principal without any authority at all, but the principals subsequently validates the act and becomes bound

32
Q

Methods of Ratification

A

(1) Express
(2) Implied

33
Q

Ratification Requirements

A

(a) Knowledge of all material facts regarding the contract
(b) accept the entire transaction AND
(c) have capacity

34
Q

What May be Ratified

A

generally a principal may ratify anything unless:
(1) performance was illegal
(2) the third party has withdrawn
(3) there has been a material change in circumstances

35
Q

Who May Ratify

A

Only disclosed (existence and identity of principal) or unidentified (principals ID withheld) principal’s may ratify

36
Q

Third Party v Agent - Principal Disclosed

A

if agent had authority, agent cannot be held liable on the contract

37
Q

Third Party v. Agent - Unidentified/Undisclosed

A

if the principal is unidentified (ID of principal) or undisclosed (agent does say they are contracting for principal) either the principal OR the agent can be held liable in contract

38
Q

Third Party v. Agent - Later Sue

A

if the third party obtains a judgment against the agent without knowledge of the principals identity, they can later sue the principal when their identity is discovered if the judgment has not been satisfied

39
Q

Principal v. Third Party

A

when the principal is disclosed, only the principal, may enforce the contract and hold the third party liable

40
Q

Unidentified and Undisclosed Principal v. Third Party

A

if principal is unidentified or undisclosed, either the principal or the agent may enforce the contract and hold the third party liable

41
Q

Vicarious Liability for Agent’s Torts

A

a principal may be vicariously liable for the torts of their agent under:
(1) respondeat superior
(2) apparent authority

42
Q

Principal Direct Liability

A

(1) a principal may be directly liable for their own negligence in hiring, retaining, or supervising the agent
(2) if they gave the agent actual authority commit the tort or ratified the tort, or in other circumstances involving independent contractors

43
Q

Respondeat Superior

A

an employer is liable for the torts of an employee committed within the scope of the employment

44
Q

Independent Contractor v. Employee

A

a principal does not reserve the right to control the manner in which work is performed by an independent contractor

45
Q

Right to Control Factors

A

(1) degree of skill required
(2) tools and facility
(3) period of employment
(4) basis of compensation
(5) business purpose
(6) distinct business
(7) characterization and understanding
(8) customs of the locality

46
Q

Scope of Employment

A

employer is liable for the employees torts only if they were committed within the scope of the employees employment

47
Q

Three Factors for Employment Scope Determination

A

(1) was the conduct of the kind the agent was hired to perform
(2) did the tort occur on the job
(3) was the conduct actuated at least in part to benefit the principal

48
Q

Frolic v Detour

A

a detour or small deviation from the employers direction is within the scope of employment while a frolic or major deviation is beyond

49
Q

Intentional Torts

A

general rule is that an employer is not liable for the intentional torts of an employee

50
Q

Intentional Tort Exception

A

intentional torts will be viewed within the scope of employment if the conduct is:
(1) a natural incident of the employee’s duties
(2) where the employee is promoting the employers business or is motivated to serve the employer; or
(3) specifically authorized or ratified by the employer

51
Q

Employer-Employee by Estoppel

A

where a principal creates the appearance of an employer-employee relationship upon which a third party relies, that principal will be estopped from denying the relationship and will be liable under the doctrine

52
Q

Liability for Acts of Independent Contractors

A

a principal will incur liability for the acts of an independent contractor where:
(1) inherently dangerous activities
(2) nondelegable duties have been delegated or
(3) the principal knowingly selected an incompetent independent contractor

53
Q

Vicarious Liability - Apparent Authority

A

a principal is vicariously liable where an agent appears to deal or communicate on behalf of the principal and the agent’s apparent authority enables the agent to (1) commit a tort or (2) conceal its commission

July 2023 MEE (16 decks)

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