AGENCY RULE STATEMENTS Flashcards
The issue is whether an undisclosed principal or the principal’s agent is liable on a contract with a third party.
An agent has the power to bind the principal to a contract when the agent acts with actual or apparent authority. Actual authority exists when the principal makes a manifestation that causes the agent to reasonably believe that the agent is authorized to act on the principal’s behalf.
Apparent authority exists when a third party reasonably relies on manifestations by the principal concerning the agent’s authority to act on the principal’s behalf.
A principal is an undisclosed principal if the third party has no notice of the principal’s existence. An agent who enters into a contract on behalf of an undisclosed principal becomes a party to the contract. Thus, when the agent does not inform a third party of the identity or the existence of the principal, the agent becomes liable to the third party on the contract.
The issue is whether a partially disclosed principal or the principal’s agent is liable on a contract with a third party.
A principal is a partially disclosed principal if the third party has notice of the principal’s existence but not the principal’s identity. Unless the agent and the third party agree otherwise, an agent who enters into a contract on behalf of a partially disclosed principal becomes a party to the contract.
The issue is whether the owner ratified the contract.
a principal can ratify an act that was done on the principal’s behalf. There are four requirements for ratification: (i) the principal must ratify the entire contract; (ii) the principal and the third party must have legal capacity to enter into the contract; (iii) the ratification must occur before the third party withdraws from the contract; and (iv) the principal must know the material facts of the transaction.
Here, all four required elements are met because
The issue is whether the employer is vicariously liable for employees tort. i.e. was the employee acting within the scope of employment
Vicarious liability is a form of strict liability in which one person is liable for the tortious actions of another. A person is an employer if the person has the right to control the means and methods by which another performs a task or achieves a result. The person subject to this right is an employee. Absent a right to control, the person is likely an independent contractor. An employer is liable for the tortious conduct of an employee that is within the scope of employment. Conduct within the scope of employment includes acts that the employee is employed to perform or that were intended to profit or benefit the employer. Careful instructions directed to the employee do not insulate the employer from liability—even when the employee acts counter to the instructions—if the employee is acting within the scope of employment.
The issue is whether the agent was acting with apparent authority
A principal is liable for a tort committed by an agent with apparent authority when the agent’s appearance of authority enables him to commit a tort or conceal its commission. For apparent authority to exist, a third person must believe that the agent acted with actual authority, and such belief must be reasonable and be traceable to a manifestation by the principal.
The issue is whether there were any unforeseeable superseding causes that broke the chain of proximate causation between the employee’s negligence and the person’s injuries.
The majority rule for proximate cause requires that the plaintiff suffer a foreseeable harm that is not too remote and is within the risk created by the defendant’s conduct.
An intervening cause is a factual cause of the plaintiff’s harm that contributes to her harm after the defendant’s tortious act is completed.
A superseding cause is any intervening cause that breaks the chain of proximate causation between the defendant’s tortious act and the plaintiff’s harm, thereby preventing the original defendant from being liable to the plaintiff.
Most courts hold that an unforeseeable intervening cause is a superseding cause that therefore breaks the chain of causation between the defendant and the plaintiff.
Examples of unforeseeable intervening causes include extraordinary acts of nature, criminal acts of third parties, and intentional torts of third parties.
