Chapter Ten-Agency + Partnership

Question 1

How is an agency relationship formed?

Answer 1

By an express or implied contract, by estoppel, by ratification, or gratuitously, but key is it grants authority

Question 2

If agency agreement is under seal it is called a

Answer 2

Power of attorney

Question 3

Actual authority if an agent

Answer 3

Authority specifically given by the principal of the agent

Question 4

Apparent authority of an agent

Answer 4

Is authority created by estoppel and is when a principal has given cause for the third party to believe the agent has authority
-principal is bound by agents actions when there is apparent authority, but may look to the agent for compensation

Question 5

What test is used to determine apparent authority?

Answer 5

Reasonable person

Question 6

Principal can…

Answer 6

Ratify a contract even if the agent has acted beyond both actual and apparent authority
-gives agent authority to act on behalf of the principal retroactive to the time of sale

Question 7

Rules of ratification of an agent-principal contract

Answer 7

• third party can set a reasonable time limit
• agent can’t make a deal and search for principal to ratify it
• principal must be capable of entering into a contract when entered into and ratified
• parties must still be able to perform object of contract

Question 8

Agent of necessity

Answer 8

Rare but when authority can be implied based on emergency and does not need permission

Question 9

Agent duties

Answer 9

• must act within actual authority otherwise breach

- fiduciary duty

Question 10

Principal duties

Answer 10

Honour terms of the contract
(If agreement is vague about authority the courts will favour an interpretation that gives the agent the broadest possible power except in case of borrowing money)

Question 11

When an agent makes it clear they acting on behalf of a principal but does not mention identity

Answer 11

Agent has no liability to third party

Question 12

If agent is ambiguous to if they are principal or agent

Answer 12

The third party can sue or be sued by either, once made up mind can’t switch

Question 13

Special cases of undisclosed parties in agency law (2)

Answer 13

• if seal, undisclosed party cannot be sued

- there can be no apparent authority

Question 14

No authority

Answer 14

Agent can be sued by third party for breach of warranty of authority or in some cases negligence or tort of deceit

Question 15

Liability of agent’s torts

Answer 15

• when agent is employee= vicarious liability
• when agent is acting individually the agent may be functioning as an employee and then =vicarious liability
• if TP believes party is employed by principal, they will be treated as such

Question 16

Termination of agency

Answer 16

-apparent authority can continue but agent’s real authority will end when notified

Question 17

Enduring powers of attorney

Answer 17

Some provincial legislation save allowed individuals to execute enduring powers of attorney which are created when principal has full capacity and are excercisable once the principal loses mental capacity