Agency part 4 Flashcards
general liability of a principal to a general contractors torts
Generally, a principal is not liable for an independant contractors torts even if they are committed in the performance of the contract
Exception to general principal liability for general contractor torts
can be liable when the activity for which the independant contractor was hired is “abnormally dangerous”
The agent is a fiduciary to of the principal
he has obligation to act in the principals best interests rather than his own
3 major duties on the agent
- loyalty,
- care,
- obedience
The duty of loyalty requires, among other things:
- account to the principal for all profits from the tranaction that have not been promised by the agen by contract
- refrain from acting as or on behalf of an adverse party
- refrain from competing with the principal
- refrain from using the principals property or confidential information for personal purposes or for a 3rd party
- disclose relevent information to the principal
- segergate the principals property and keep and render accounts, and
- act in accordance with a general duty of good conduct
The agent must perform any
contractual duties owed to the principal
all profits mafe by an agent in the course of an agency belongs to the principal whether
they are the fruits of performance, or the violation of an agent’s duty
with respect to principals and agents who are individuals, the death of either the principal or agent
terminates the agency relationship
When not individuals, the agency relationship is terminated when the principal or agent
ceases to exist, commences a process that willl lead to cessation of existance, or has its powers of operations suspeded
13 changed circumstances that may cause a agency relationship to terminate
- lapse of time
- accomplishment of authorized act
- happening of specified events
- happening of unspecified events or changes
- chenge in value or business conditions
- loss or distruction of subject matter
- loss of qualification of principal or agent
- disloyalty of agent
- bankrupcy of agent
- bankrupcy of principal
- war
- change of law
- impossibility
The agent may continue to have apparent authority to third parties who lack notice of
termination
Apparent authority terminates when it
is no longer reasonable for the 3rd party to believe that the agent continues to act with actual authority
The principal or agent may terminate the agency relationship at will, even when
such termination constitutes a breach of contract
- the breaching party will be liable under contract law for any damages cause to the other party
Apparent authority, not otherwise terminated, terminates when the third party has notice of:
3 answers
- the termination of the agents authority
- a manifestation by the principal that he no longer consents
- facts, the failure to reveal which, were the transaction with the principal in person, would be grounds for recission by the principal
Scope of employment
forbidden acts
Although forbidden, or done in a forbidden manner, may be within the scope of employment
Scope of employment
criminial or tortious acts
an act may be within the scope of employment although consciously criminal or tortious
Where a partys non-performance contributes materially to the non-occurance condition of the duties
the non-occurance is excused
A principal is not liable for physical harm caused by the negligent physical conduct of a non-servant agent during the performance of the principal’s business, if he
neither intended nor authorized the result nor the manner of
performance, unless he was under a duty to have the act performed with
due care.
A principal is subject to liability for physical harm to the person or the
tangible things of another caused by the negligence of a servant or a non-servant agent:
- (a) in the performance of an act which the principal is under a duty to have performed with care; and
- (b) in the making of a representation which the agent is authorized or apparently authorized to make or which is within the power of the agent to make for the principal.
A person who makes a contract with another to perform services as an agent for him is subject to a duty to act
in accordance with his promise
unless otherwise agreed, a paid agent is subject to a duty to the principal to act with a
standard of care and with skill which is standard in the locality for the kind of work which he is employed to perform it and, in addition to exercise any special skill that he has
unless otherwise agreed, a gratuitious agent is under a duty to the principal to act with
the care and skill which is required of person not agents performing similar gratuitious undertakings for others
Unless otherwise agreed, an agent is subject to a duty to his principal to act solely for
the benefit of the principal in all matters connected with his agency.
Unless otherwise agreed, an agent who makes a profit in connection with transactions conducted
by him on behalf of the principal is under a duty to
give such profit to the principal.
Unless otherwise agreed, an agent is subject to a duty to the
principal not to
- use or to communicate information confidentially given him by the principal or acquired by him
during the course of or on account of his agency or - in violation of his duties as agent,
- in competition with or to the injury of the principal,
- -on his own account or on behalf of another, although such information does not relate to the transaction in which he is
then employed, - unless the information is a matter of general knowledge.
If an agent has received a benefit as a result of violating his
duty of loyalty, the principal is entitled to
- ecover from him what
he has so received, its value, or its proceeds, and also the amount
of damage thereby caused; - except that, if the violation consists of the wrongful disposal of the principal’s property, the principal cannot recover its value and also what the agent received in exchange
therefor.
A principal who has recovered damages from a third person
because of an agent’s violation of his duty of loyalty is entitled
nevertheless to
obtain from the agent any profit which the agent improperly received as a result of the transaction
An agents actual authority may be terminated by:
- The agents death (cessation of existance, or suspension of powers) or
- The principals death, cessation of existance, or suspension of powers
- the principals loss of capacity
- An agreement between the agent and the principal of the occurance of circumstances on the basis of which the agent should reasonably conclude that the principal no longer would assent to the agents taking action on the principals behalf
- A manifestation of revocation by a principal to the agent, or of renunciation by the agent to the principal
- the occurance of circumstances specified by statute
Notwithstanding any agreement between principal and agent, an agents actual authority terminates if the agent
renounces it by a manifestation to the principal or if the prinipal revokes the agents actual authoerity by a manifestation to the agent.
- A revocation or renunciation is effective when the other party has notice of it
A principals manifestation of revocation is unless otherwise agreed, is innefective to terminate
a power given as security or to terminate a proxy to vote securities or other membership or ownership interests that is mafe irrevocable i compliance with applicable legislation
Material benefit arising out of position
An agent has a duty not to acquire
a material benefit from a third party in connection with transactions conducted with transactions conducted or other actions taken on behalf of the principal or otherwise through the agents use of the agents position
An agent has a duty not to deal with the principal as or on behalf
of an adverse party in a
transaction connected with the agency relationship.
A principal may consent to conduct by an agent that would
otherwise constitute a breach of the
agents duties
A]n agent whose acts on behalf of a party consist solely of
ministerial acts that require no exercise of discretion, judgment, or skill does not act on behalf of that party for purposes of determining
whether the agent acts adversely to
another principal.
Thus, one principal’s agent who performs
only ministerial acts for another does not become a dual
agent.
Subject to any agreement with the principal, an agent has a duty to the principal to act with the ____ ,_____ ,____ normally exercised by agents in similar circumstances
care, competence, and dillagence
special skills or knowledge possessed by an agent are circumstances to be taken into account in determining whether the agent acted with
due care, competence, and dilligence
If an agent claims to possess special skills or knowledge, the agent has a duty to the principal to act with the
care, competance, and dilagence normally exercised by agents with such skills or knowlege
conflict with laws
the court will applt the law of the state with the
most significant relationship to the partnership and transaction at issue
- the parties may choose to vary this resukt by agreement
A choice of law provision will be invalidated only if:
- there is no substantial relationship between the state whose law is chosen and the parties of the transaction at issue, and there is no other reasonable basis for the parties choice, or
- the state whose law would otherwise applied has a materially greater interest in the controversy and has a fundamental policy interest that would be contravened by application of the chosen states law
borrowed servent
outcome for liability - factor test
- extent of control over details and timing of work
- employees work and special employees business
- nature of the employees work
- skills required for employees work
- degree of customary supervision
- duration
- equiptment and instrumentalities
- payment
A disclosed principal is when
you know the name of the principal
a partially disclosed principal/unidentified principal is when
you know theres a principal but not their name
an undisclosed principal is when
you do not know there is a principal
respondeat superior
employee/servent commit a tort + acting within scope of employment =
principal is liable too
When principals are liable for actions outside the scope of employment
4
- principal intends consequences
- non-delegable duty
- apparent authority or aided by agency relationship
- principals own misconduct - negligence or recklessness
A master is not subject to liability for the torts of his servants
acting outside the scope of their employment, unless:
- (a) the master intended the conduct or the consequences, or
- (b) the master was negligent or reckless, or
- (c) the conduct violated a non-delegable duty of the master, or
- (d) the servant purported to act or to speak on behalf of the principal and there was reliance upon apparent authority, or he was
aided in accomplishing the tort by the existence of the agency
relation.
A principal is subject to liability to a third party harmed
by an agent’s conduct when the agent’s conduct is
within the scope of the agent’s actual authority or
ratified by the principal; and
- (1) the agent’s conduct is tortious, or
- (2) the agent’s conduct, if that of the principal, would
subject the principal to tort liability.
A principal required by contract or otherwise by law to protect another cannot avoid liability by
delegating performance of the duty, whether or not the delegate is an agent.
