Agency Relationship and Third Parties Flashcards
What is the primary topic discussed in relation to agency on the MEE®?
The liability of principals and agents to third parties
This is the most frequently tested topic on the MEE®.
When are agents liable to third parties?
Agents are liable for harm caused by their negligence or intentional tortious conduct, regardless of whether they are acting within the scope of the agency relationship.
What defines a fully disclosed principal?
A principal whose existence and identity are known to the third party.
What is the general rule regarding an agent’s liability when contracting on behalf of a fully disclosed principal?
The agent will NOT be personally liable on the contract.
What happens if an agent contracts on behalf of a not fully disclosed principal?
The agent will be personally liable on the contract, along with the principal.
What must an agent do to escape personal liability when representing a principal?
The agent must make clear to the third party that they are representing a principal and are not a party to the contract.
What is the doctrine of respondeat superior?
An employer is vicariously liable for the torts of an employee committed within the scope of employment.
What does joint and several liability mean in the context of employer-employee relationships?
The employer and employee are both liable for the torts committed by the employee.
Under what circumstances can a principal be vicariously liable for torts committed by a non-employee agent?
When the agent acts with apparent authority.
What constitutes ‘scope of employment’?
When an employee performs tasks assigned by the employer or engages in conduct subject to the employer’s control.
What is the difference between a ‘frolic’ and a ‘detour’?
A frolic is a substantial deviation from the authorized route, while a detour is a slight deviation.
When can employers be liable for an employee’s intentional torts?
If the tort is accomplished in the course of doing the employer’s work and for the purpose of accomplishing such work.
Are employers generally liable for the tortious conduct of independent contractors?
No, employers are generally NOT liable for damages resulting from the tortious conduct of independent contractors.
What are some exceptions to the rule of non-liability for independent contractors?
Inherently dangerous activities, nondelegable duties, negligent selection of a contractor.
What is negligent supervision in the context of agency?
A principal is liable for harm caused by their negligence in selecting, training, retaining, supervising, or otherwise controlling the agent.
When are principals liable on contracts with third parties?
When their agents act with actual authority (express or implied) in entering those contracts.
What happens when an agent acts with apparent authority?
A party will be liable on a contract as if it were principal to an agent who acted with actual authority.
What is the implied warranty of authority?
If a person contracts on behalf of another without the power to do so, they are liable for breach of implied warranty of authority.
Can undisclosed principals grant apparent authority?
No, undisclosed principals cannot grant apparent authority.
Is the doctrine of apparent authority applicable to tort liability disputes?
Generally, no; it is applicable to contractual liability disputes.
