Ch 33 Agency Liability and Termination

Question 1

express authority

Answer 1

authority declared in clear, direct, and definite terms

Question 2

equal dignity rule + 3 exceptions

Answer 2

IF CONTRACT BEING EXECUTED MUST BE IN WRIITNG, THEN AGENTS AUTHORITY MUST ALSO BE IN WRITING, else voidable at option of principal; contract regarded by law as mere offer
Elif: 1. executive offiver of corp normally can conduct ordinary busi transactions wo obtaining written auth fr corp; 2. when agent acts in presence of principal 3. when agents act of signing is merely a formalisty, X need written authy to sign

Question 3

power of attorney

Answer 3

written doc and uaully notarized == when notary public (person auth to attest to authenticity of signatures) signs, dates, and imprints the doc with their seal of authority

Question 4

special v general power of attorney

Answer 4

1. permitting agent to perf specified acts only

2. permitting a* to transact all busi f prin*

Question 5

implied authority

Answer 5

doing what is reasonably necessary to carry our express authority and accomplish the objectives of the agency
By custom or inferred from a*’s position
X contradict express authority

Question 6

apparent authority

2 ways it happens

Answer 6

when principal, either word or action, causes a 3rd party reasonably to believe that the a* has authority to act, even enough agent has X express/implied authority
A PATTERN OF CONDUCT - usu~ how apparent authority comes into existence

Question 7

(agency scope) emergency powers

Answer 7

when unforeseen emergency demands action by a* to protect/preserve property + rights o principal, but a* unable to communicate with principal

Question 8

(agency scope) ratification

Answer 8

when prin* affirms responsibility for an agent’s unauthorizes act
Prin* bound to a’s act, and the act - treated as if it had been authorized by prin from outset
a* may be laible to 3rd party for misrep authy

Question 9

(agency scope) ratification rqs (6)

Answer 9

agent must have acted on behalf o ID princ* who subsequently ratifies action
princ* must know all o material facts involved in transaction, else princ* can rescind contract
principal must affirm agent’s act in entirety
princ* must have legal capacity to auth transaction @ same time agent engages in act + @ time prinipal ratifies, 3rd party must also have legal capacity to engage in transaction
principal’s affirmation must occur before 3rd party withdraws fr transaction
princ* must observe same formalities when ratifying act as would been required to auth it formally

Question 10

(agency) liability for contracts depends on

Answer 10

how prin* - classified + whether actions o a* - autho/unauth

Question 11

disclosed principle

Answer 11

princ* whose ID - known by 3rd p* @ time contract - made by agent

Question 12

partially disclosed principal

Answer 12

ID X known by 3rd party, but 3rd p* knows agent -/may be acting f principal @ time contract - made

Question 13

undisclosed principal

Answer 13

ID totally unknown by 3rd party, no knowledge agent - act in agency capacity when contract made

Question 14

authorized acts - disclosed, partially disclosed, undisclosed

Answer 14

Disclosed -> a* no contractual liability
Partially disclosed -> (mj~ states) a* party to contract -> 3rd party can hold a* liable f contractual nonperf
INDEMNIFICATION - When prin* ID is undisclosed + a* - forced to pay 3rd party, a* is [t] by principal, principal has duty to perf
PERFORMANCE - when ID revealed, 3rdd party can elect to hold either prin* or a* liable on contract OR undisclosed prin* can rq 3rd party to fulfill unless (1/3):
- Undisclosed prin* - expressly excluded as party in written contract
- Contract - negotiable instrument signed by agent w no indication o signing in a rep capacity
Perf o agent - personal to contract -> allow 3rd p* to refuse princ* perf

Question 15

(unathorized acts) implied warranty

Answer 15

a* impliedly warrants that they have authority to enter contract on behalf of principal, agent liable

Question 16

(unathorized acts of agent) 3rd party knowledge

Answer 16

know agent X authority -> a* X liable

If a* expresses to 3rd p* uncertaity as to the extent of their authority, agent - X personally liable

Question 17

liability for agent misrep

Answer 17

principal liable whenever third person sustains loss b/c a’s misrep
f( whether a - actually /apparently authorizes to make rep + whether rep - made within scope of agency)
Prin* always directly respoonsible f agents misrep made within scope o agent’s authority

Question 18

apparent implied authority

Answer 18

when principal has places a* in position o apparent authority, making it possible f agent to defraud 3rd party, prin* may also be liable f a*’s fraudulent acts

Question 19

(agency) innocent misrepresentation - effects and responsibility

Answer 19

grounds for rescission and award of damages
When prin* knows a* X accurately advised o facts but X correct either agent’s or the third p’s impressions, prin - responsible

Question 20

presondeat superior

Answer 20

“let the master respond” -> principal-empr* liable f any harm caused to 3rd p* by agent-emee in course/scope o employemnet
Imposes Vicarious liability or indirect liability

Question 21

doctrine of respondeat superior

why?

Answer 21

imposed regardless of fault

UNDERLYING RATIONALE social duty that rq e * to manage own affairs to not injure another

Question 22

determining scope of employment factors (8)

Answer 22

Whether employee act - authorized by empr
Time, place, purpose of act
Whether act - 1 commonly perf by emplees on bhealf o employers
Extent tto which empr;s interest - advanced by act
Extent to which private interests o empmloyee - invplved
Whether employer furnished means/instrumentality by which injury - inflicted
Whetehr amploer has reason to know that the empee would perf act + wether empee had done it before
Whether act involved commission o serious crime

Question 23

difference between detour and frolic

Answer 23

If servant took detour fr masters business, master - responsible, if on frolic of his own, master X liable

Question 24

(liability agency) employee travel time

Answer 24

if travel - part o * position, travel time - normally considered within scope o employement

Question 25

(agency) notice of dangerous conditions

Answer 25

empr charged w knowledge o any danerous conditions discovered by empee + pertinenet to amployemnt situation

Question 26

(agency) liability for intentional torts

Answer 26

empr can be liable f intentional torts that empee commits within course/scope o employemnt

• Empr who knows/should know empee has propensity f committting tortious acts - liable f emmployees acts even if they would not ordinarily be considere within scope o employenet
• • Also liable f permitting empee to engage in reckless actions that can injure oth
• > purchase liability insurance

Question 27

(agency) liability for independent contractor’s torts

Answer 27

gen~ empr X liable f phys harm caused to a 3rd * by negligent act o indep contractor in perf o contractb/c no right to control details o indep contractor’s perf
Exception: when contract incl unusually hazardous activities -> strict liability

Question 28

(agency) liability for agent crimes

Answer 28

prin* X liable unless made when prin/empor participated in crime by conspiracy / other action
Some juris - prin liable under specific statute if agent in course + scopr o employement, vioaltes certain regulations

Question 29

termination of agency rq (1)

Answer 29

3rd * needs to be notified by the principal that agency has been terminated, unless they know rela -> constructive notice
if a* authority was written, m~ must be revoked in writing

Question 30

(agency) why/how parties terminate agency (5)

Answer 30

lapse of time, achievement o purpose, occurrence o specific event, mutal agreement, and at the option o 1 party

Question 31

do both parties have power to terminate agency? 2 terms

Answer 31

yes, revocation - done by principal, renunciation - done by agent

Question 32

(agency) wrongful termination - basis and how to avoid

Answer 32

Neither always have right to terminate agency; wrongful termination can -> lawsuit f breach o contract
Prin* must give a* reaosnable notice to allow to recoup expenses + soemtimes to make a normal profit

Question 33

agency coupled with an interest
def + implications

Answer 33

agent has some legal right to property that - subject o agency, agency was created f agents benefit
b/c a*’s interest in subject matter, agency irrevoable

Question 34

termination by operation of law rq (1)

Answer 34

No duty to notify 3rd p* unless agents authority - coupled w an interest

Question 34

ways agency can be terminated by law (5)

Answer 34

Death/insantiy
Impossibility - subject matter destroyed/lost or change in law
Changed circumstances - a* can reasonably infer that the prin* will X want agency to continue -> terminates
Branruptcy -> usu~ terminated, unless fin status irrelevant to purpose o agency
- Insolvency X necessarily terminate rela
- - Insolvent * == * who X pay debts as they come due / whose liabilities exceed their assets
War - when prin* country and a* country - @ war w e other -> temrinated/suspended b/c p way to enforce legal rights + obligations o parties