Chapter 19 Agency Relationships Flashcards
Independent contractors ____ Bind who they work for to a contract
Cannot
Agents ____ bind principle to contract
Can
Agents can create this on those who hired them
Contract liability
Tort liability on employer
can be created by agents and employees
5 Duties of Agent to Principal
P,N, L, A, I
- Performance
- Notification - notice to agent is notice to principle
- Loyalty/Obedience
- Accounting
- Indemnification - covering principals expenses to whom the debt is owed
5 Duties of Principal to Agent
C, R, I, C, S
- Compensation
- Reimbursement - No liability to 3rd party
- Indemnification - principal gives agent bad information
- Cooperation
- Safe Working Conditions
3 Scopes of agent’s authority
- Express Authority - Whats clearly indicated the agent can do
- Implied Authority - (Purchase gas for air fleet)
- Apparent Authority - Comes not from what the agent says but from “whatever the vendor says, goes”
Ratification
When an Agent does something unauthorized
Contract liability for principal is valid if
Agent enters with express, implied, or apparent authority
Contract Liability of Agents in acts with authority
- Disclosed principal - Agent not liable if you know everyone involved
- Partially Disclosed Principal - Agent personally liable when you don’t know who they work for
- Undisclosed principal - Agent personally liable for failing to disclose who they work for
Vicarious liability of principal for agents (respondeat superior)
- Scope of employment - if it wasn’t within the scope, employer wouldn’t be liable
- “Frolic and detour” - vicarious liability remains intact
Termination of Agency by Operation of Law
- Death or insanity
- Impossibility
- Changed Circumstances
- Bankruptcy
- War
Termination of agency by act of parties
- Lapse of time
- Purpose achieved
- Occurrence of a specific event
- Mutual agreement
Termination of Agency by 1 party
Normally, principal has right to terminate
- Wrongful Termination - lack the power and right to terminate
