Agency Part 5 Flashcards
Conduct of a servant is within the scope of employment if, but only if:
- (a) it is of the kind he is employed to perform;
- (b) it occurs substantially within the authorized time and space limits;
- (c) it is actuated, at least in part, by a purpose to serve the master;
and - (d) if force is intentionally used by the servant against another, the
use of force is not unexpectable by the master.
An act of a servant is not within the scope of employment if it is done with no intention to
perform it as a part of or incident to a service on account of which
he is employed.
Dual Purpose
An employee may engage in conduct, part of which is
within the scope of employment and part of which is not.
Expect Bad Employees Rule
Just because employees don’t follow directions or the law doesn’t mean they are outside the scope of employment.
A master is subject to liability for the intended tortious harm
by a servant to the person or things of another by an act done
in connection with the servant’s employment, although the act
was unauthorized, if the act was
not unexpectable in view of
the duties of the servant.
Employees that don’t do what they are told can still be
in the scope of employment
The fact that an employee’s action violates a generally applicable law, such as a speeding limit, does not by itself place the employee’s conduct
outside the scope of employment
An employee’s failure to take action may also be
conduct
within the scope of employment.
person is subject to liability for the
consequences of another’s conduct which results from his directions as he would be for his own personal conduct if
- with knowledge of the conditions
- he intends the conduct, or if he intends its consequences
- unless the one directing or the one acting has a privilege or immunity not available to the other
A principal is not liable for physical harm caused by the negligent physical 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 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.
Consequences of a breach of duty
principal can
sue agent for damages
Agent’s Duties - Loyalty
5 duties
- dont steal from principal
- accounting and no comingling
- no competition and acting adverse
- no use of property
- catch all (dont be shady)
Agent’s Duties - Loyalty
dont steal from the principal
Turn over profits unless
otherwise agreed
Agent’s Duties - Loyalty
Accounting and no-comingling
- Keep accounts
- Keep Principal’s property
separate unless
otherwise agreed
Agent’s Duties - Loyalty
No Competition and Acting
Adverse
- Not act as or on behalf of an
adverse party (can be waived) - Not compete with Principal
- Disclose conflicts of interest
Agent’s Duties - Loyalty
No Use of Property
Not use Principal’s property or
confidential information
Agent’s Duties - Loyalty
Catch all
Dont be Shady! put the principal first
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.
An agent has a duty not to acquire a material benefit
from a third party in connection with
transactions conducted or other actions taken on behalf of the
principal or otherwise through the agent’s use of the
agent’s position.
If a principal recovers damages from a third party as a
consequence of an agent’s breach of fiduciary duty, the
principal remains entitled to
recover from the agent
any benefit that the agent improperly received from
the transaction
Agents Duties - Care
easier to violate then loyalty, this duty is about
intention
Agents Duties - Care
3 duties
- reasonable care
- keep principal informed
- good conduct
Agents Duties - Care
Reasonable care
- Unless otherwise agreed is the
standard care and skill which is
standard in the locality for the kind of work, taking into account special
skills. - Gratuitous measured against other
gratuitous undertakings
Agents Duties - Care
Keep principal informed
- 2nd Restatement - unless otherwise agreed
- 3rd Restatement – only for material information
Unless otherwise agreed, a gratuitous agent is under a duty to the principal to act with the care and skill which is
required of persons not
agents performing similar gratuitous
undertakings for others.
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.
Agent’s Duties - Good Faith and Fair Dealing
Dont get cute (3 parts)
- Honor the spirit of the deal
- Don’t abuse discretion to undermine the deal
- Neither party shall do anything which will have the effect of destroying or injuring the right of
the other party to receive the fruits of the contract
Agents Duties - Obedience
2 pts
- Agent’s Duties – Obedience
Duty to follow reasonable instructions unless there is an excuse privileging protection of the Agent or others - Duty to act within the scope of
actual authority (3rd restatement= agent act within actual or express authority)
Principals are not _____ of the agent
fiduciaries
Principals have a duty to comply with the
agreement
Principals duties to the agent
6 implied duties
- Compensation
- Indemnification
- Disclosure of Risks
- Not injure the business reputation or self-respect
- Provide a safe working environment for employees
- Good faith
under certain circumstances you can not expect payment
reasonable person - no friendship bill
Termination of Agency authority
5 pts
- Death or Incapacity
- mutual agreement
- at will
- by statute
- change in circumstances
An agent’s actual authority may be terminated by:
6
- the agent’s death, cessation of existance, or suspension of powers
- the principals death, cessationof existance, or suspension of powers
- the principals loss of capacity
- an agreement between the agent and the principal or the occurrence
of circumstances on the basis of which the agent should reasonably
conclude that the principal no longer would assent to the agent’s taking action on the principal’s behalf - a manifestation of revocation by the principal to the agent, or of
renunciation by the agent to the principal - the occurrence of circumstances specified by statute.
Termination of the agency authority
when looking at the 12 changed circumstances, what are we looking at
from the agents perspective do they reasonably believe they would want them to act?
Termination of Actual vs. Apparent Authority
- Agent will have Actual Authority until its no
longer reasonable for the Agent to believe the
Principal wants the Agent to act. - Agent will have Apparent Authority until its no longer reasonable for the 3rd party to believe the agent has authority
Lingering Duties After Termination
- No longer a fiduciary
- Still can’t use confidential information from when
they were an agent
Termination Problem
- real estate agent to sell farm
- farm turns out to have oil
- still sells for original price
Did real estate agent still have authority?
Should have known, authority was terminated
What is the difference between the term “business” and
the term “corporation?”
Business: anything, etsy, lemonaid stand
Corporation: type of business, does what state tells them to do
