Lecture 1

Question 1

Rest 3d. 1.01: Agency Defined

Answer 1

Agency is the fiduciary relationship that arises when one person (P) manifests assent to another person (A) that the agent shall act on the principal’s behalf and subject to the principal’s control, and the agent manifests assent or otherwise consents so to act

Question 2

Rest. 3d 1.02: Parties’ Labeling and Popular Usage Not Controlling

Answer 2

An agency’s relationship arises only when the elements stated in 1.01 are present. whether a relationship is characterized as agency in an agreement between parties or in the context of industry

(it does not matter if the relationship is labeled as agency in an agreement between parties. if the elements of 1.01 are satisfied an agency relationship has arisen

Question 3

Rest. 3d 1.03: Manifestation

Answer 3

manifestation of assent or intention occurs through written or spoken words or other conduct

Question 4

Rest. 3d 1.04 (1): Terminology

Answer 4

(1)Coagents: have agency relationships with the same principal, is appointed by the P or by another A actually or apparently authorized by the principal to do so

Question 5

Rest. 3d 1.04 (2)(a,b,c): Terminology

Answer 5

(2) Disclosed, undisclosed and unidentified principals

(a)disclosed principal: a P is disclosed if when an A and a 3rd party interact, the 3rd party has notice that the A is acting for a P and has notice of the P’s identity

(b)undisclosed principal: a P is undisclosed if when A and a 3rd party interact the 3rd party has no notice that the A is acting for a P

(c) unidentified principal: a P is unidentified if when an A and a 3rd party interact the 3rd party has notice that the agent is acting for a principal but does not have notice of the P’s identity

Question 6

Rest. 3d 1.04(3): Terminology

Answer 6

Gratuitous agent: a gratuitous agent acts without a right to compensation

Question 7

Rest. 3d 1.04(4): Terminology

Answer 7

Notice: a person has notice of a fact if the person knows the fact, has reasons to know the fact, has received an effective notification of the fact or should know the fact to fulfill a duty owed to another person. notice of a fact that an agent knows or has reason to know is imputed to the principal as stated in 5.03 and 5.04. A notification given to or by an agent is effective as notice to by the principal as stated in 5.02

Question 8

Rest. 3d 1.04(5): Terminology

Answer 8

Person: a person is (a) an individual, (b) an organization or association that has legal capacity to possess rights and incur obligations; (c) a government, political subdivision, or instrumentality or entity created by government; or (d) any other entity that has legal capacity to possess rights and incur obligations

Question 9

Rest. 3d 1.04(6): Terminology

Answer 9

Power given as security: A power given as security is a power to affect the legal relations of its creator that is created in the form of a manifestation of actual authority and held for the benefit of the holder or a third person. it is given to protect a legal or equitable title or to secure the performance of a duty apart from any duties owed the holder of the power by its creator that are incident to a relationship of agency under 1.01

Question 10

Rest. 3d 1.04(7): Terminology

Answer 10

Power of attorney: is an instrument that states an agent’s authority

Question 11

Rest. 3d 1.04(8): Terminology

Answer 11

Subagent: a person appointed by an agent to perform functions that the agent has consented to perform on behalf of the agent’s principal and for whose conduct the appointing agent is responsible to the principal. The relationship between an appointing agent and a subagent is one of agency, created as stated in 1.01

Question 12

Rest. 3d 1.04(9): Terminology

Answer 12

Superior and subordinate coagents: a superior coagent has the right, conferred by the principal to direct a subordinate coagent

Question 13

Rest. 3d 1.04(10): Terminology

Answer 13

Trustee and agent-trustee: a trustee is a holder of property who is subject to fiduciary duties to deal with the property or the benefit of charity or for one or more persons, at least one of whom is not the sole trustee. An agent-trustee is a trustee subject to the control of the settlor or of one or more beneficiaries

Question 14

Rest. 3d 2.01 Actual Authority

Answer 14

Agent acts with actual authority when at the time of taking action that has legal consequences for the Principal, the agent reasonably believes, in accordance with the principal’s manifestations to the agent, that the Principal wished the Agent so to act

Question 15

Rest. 3d 2.02 (1) Scope of Actual Authority

Answer 15

(1) an A has actual authority to take actions designated or implied in the principal’s manifestations to the A and acts necessary or incidental to achieving the P’s objectives, as the A reasonable understands the P’s manifestations and objectives when the A determines how to act

Question 16

Rest. 3d 2.02 (2) Scope of Actual Authority

Answer 16

(2) An A’s interpretation of the P’s manifestations is reasonable if it reflects any meaning known by the agent to be ascribed by the P and in the absence of any meaning known to be A, as a reasonable person in the A’s position would interpret the manifestations in light of the context, including circumstances of which the agent has notice and the agent’s fiduciary duty to the principal

Question 17

Rest. 3d 2.02(3) Scope of Actual authority

Answer 17

(3) an agent’s understanding of the principal’s objectives is reasonable if it accords with the principal’s manifestations and the inferences that a reasonable person in the agent’s position would draw from the circumstances creating the agency

Question 18

Rest. 3d 2.03 Apparent Authority

Answer 18

Apparent authority is the power held by an agent or other actors to affect a principal’s legal relations with 3rd parties when a 3rd reasonably believes the actor has authority to act on behalf on the principal and that belief is traceable to the principal’s manifestations

Question 19

Rest. 3d 3.01 Creations of Actual Authority

Answer 19

actual authority as defined in 2.01, is created by a principal’s manifestation to an agent that as reasonably understood by the agent, expresses the principal’s assent that the agent take action on the principal’s behalf

Question 20

Rest. 3d 3.03 Creation of Apparent Authority

Answer 20

Apparent authority is defined in 2.03 is created by a person’s manifestation that another has authority to act with legal consequences for the person who makes the manifestation, when a third party reasonably believes the actor to be authorized and the belief is traceable to the manifestation

Question 21

Rest. 3d 3.15 (1) Subagency

Answer 21

(1) a subagent is a person appointed by an agent to perform functions that the agent has consented to perform on behalf of the agent’s principal and for whose conduct the appointing agent is responsible to the Principal. The relationships between a subagent and the appointing agent and between the subagent and the appointing agent’s principal are relationships of agency as stated in 1.01

Question 22

Rest. 3d 3.15 (2) Subagency

Answer 22

(2) An agent may appoint a subagent only if the agent has actual or apparent authority to do so

Question 23

Rest. 3d 3.16 Agent for Coprincipals

Answer 23

2 or more persons may as coprincipals appoint an agent to act for them in the same transactions or matter