Chapter 1: Introduction, Agents and Formation

Question 1

How is an agency relationship created and what is it based on?

Answer 1

By appointment, implied by facts or circumstances, or based on third party’s reasonable reliance.

Elements: mutual assent by agent and principal, agent acts on principal’s behalf, agent it under the principal’s control.

No writing or consideration needed

Involves principles of K and tort law

Question 2

Principal

Answer 2

Any person or entity can serve as a principal

Principals must have capacity to K

Question 3

Agent

Answer 3

Does not need capacity to K

Must have capacity to assent to act on the principal’s behalf and under principal’s control

Question 4

Independent Contractor

Answer 4

Subject to less control than an employee. The key factor is the degree of the principal’s control regarding time, place, manner, and details of the
agent’s work.

A principal is liable for the employment reacted torts of an employee, but not usually an I.C. Except non-delegagble duties or negligent hiring.

Question 5

General Agent

Answer 5

Agent has broad authority over a wide variety of tasks

Question 6

Special agent

Answer 6

Agent’s authority is limited in scope