General Flashcards
What is an agency relationship?
A voluntary, fiduciary relationship between a principal and an agent.
What binds the principal in an agency relationship?
The principal has authorized the agent to act on the principal’s behalf and the agent, acting within the scope of authority granted by the principal.
Does an agency relationship have to be based on a contract?
No, it can be based on a contract but does not have to be.
What is a gratuitous agency?
An agency relationship where the principal does not compensate the agent.
What is a contractual agency?
An agency relationship that can take many forms, commonly employer-employee and employer-independent contractor.
In an employer-employee relationship, what does the employer control?
The employer has the right to control what the employee does and how they do it.
In an employer-independent contractor relationship, what does the employer control?
The employer has the right to control what the independent contractor does, but not how they do it.
Fill in the blank: A business providing tools and detailed instructions indicates a(n) _______ relationship.
employer-employee
Fill in the blank: A business saying, ‘Come every two weeks and keep things neat and tidy’ indicates a(n) _______ relationship.
employer-independent contractor
What factors determine the employer’s right to control?
- Whether the work is typically performed by specialists without supervision
- Who supplies the agent with tools and a place to perform the work
- Length and exclusivity of the employment relationship
- Whether the agent was paid by the job or at regular intervals
- Whether the agent’s work is part of the employer’s regular business
What is ‘agency by estoppel’?
An equitable doctrine invoked to protect a third party from damage or loss when no actual agency exists.
What is ‘apparent authority’?
An equitable doctrine that treats parties as if an agency had existed, protecting third parties.
When does a contract arise between the principal and a third party?
When an agent with actual or apparent authority contracts on behalf of a disclosed principal.
True or False: An agent contracts with a third party on behalf of a principal, creating a contract between the agent and the third party.
False
When may parties appeal to the equitable doctrines of agency by estoppel and apparent authority?
When there is in fact no actual agency and thus no agent acting within the scope of actual authority granted by a principal.
When these related concepts are invoked by a court, often no actual agency has been created; instead, parties are treated as if an agency had existed and as if an agent had acted within the scope of authority granted by a principal.
