Class 2, Agency Formation And Relevance To Business Associations

Question 1

Creation of an Agency relationship

R.3d § 1.01

Answer 1

• A person (the principal) manifests assent to another (the agent)
  ① that the agent shall act on behalf of the principal, and
  ②that the agent shall be subject to principal’s control, and
  -The agent manifests consent to do so.

Question 2

Actual Authority

R.3d §3.01,2.01

Answer 2

-the principal must make a manifestation to the agent
-The manifestation shows that the principal wants the agent to act on his behalf
- The agent’s interpretation of the principal’s manifestation must be reasonable

Question 3

Apparent Authority

R. 3d §3.03,2.03

Answer 3

• The principal must make a manifestation that somehow reaches the third party
• The manifestation shows that the agent has the authority to act for the principal
• the third party’s interpretation of the principal’s manifestation must be reasonable

Question 4

Liability of an agent (torts)

R. 3d § 7.01

Answer 4

• If the agent commits a tort,
• then the agent is liable to the injured party
• unless a statute says otherwise

Question 5

Liability of a principal (torts)

R. 3d §7.07

Answer 5

• If the agent is an employee of principal
• if the agent commits a tort, and
• if the agent is acting within the scope of his employment
• then the principal is vicariously liable to the injured party

Question 6

Agency defined

Answer 6

①fiduciary relationship

② one person manifests assent to another that agent shall act on principal’s behalf and subject to the principal’s control

③ agent manifests assent or otherwise consents to act.

Question 7

Disclosed agent

Answer 7

Third party has notice that the agent is acting for principal and has notice of the principal’s identity

Principal and third-party are parties to the contract, but not unless agent and third-party consent

Question 8

Undisclosed agent

Answer 8

Third party has no notice the agent is acting for a principal

Principal and third party are parties to a contract, AND agent, UNLESS agent and third party consent otherwise

Question 9

Unidentified agent

Answer 9

Third party has no notice that agent is acting for a principal, but no notice of identity of principal

Everyone is a party to the contract.

Question 10

Creation of actual authority

Answer 10

Manifestation to an agent, as reasonably understood by the agent, expresses principal’s assent that the argent take action on principal’s behalf.

Question 11

Creation of apparent authority

Answer 11

① manifestation that another has authority to bind the person

② Third party reasonably believes the actor to be authorized

③ belief is traceable to manifestation.