Liability

Question 1

Actual authority

Answer 1

The authority the agent reasonably believes they possess based on the P’s dealings with them

Question 2

Express authority

Answer 2

That which is actually contained within the four corners of the agency agreement.

Question 3

Implied authority

Answer 3

Authority the agent reasonably believes they have as a result of the P’s words or actions

Question 4

Termination of Actual Authority

Answer 4

Can happen by an event happening; lapse of a reasonable time; a change in circumstances; A’s breach of fiduciary duty; either party’s unilateral termination; operation of law

Question 5

Apparent authority

Answer 5

Exists when the P holds out another as possessing authority and based on this, a third party is reasonably led to believe that authority exists

Question 6

What is the policy behind apparent authority?

Answer 6

Protecting inoccent third parties who rely on the P’s holding out someone as their agent

Question 7

Situations where A exceeds authority but P still bound

Answer 7

Prior act; power of position

Question 8

Inherent authority

Answer 8

Derived solely from the agency relationship and results in P being bound even though A had no authority to perform the particular act.

Question 9

Ratification

Answer 9

Effectively serves as a substitute for before-the transaction authority

Question 10

Methods of Ratification

Answer 10

Oral or written affirmation of a contract; when P accepts the benefits of the contract; silence (if there is a duty to disaffirm or is sueing on the transaction)

Question 11

Requirements for ratification

Answer 11

P must:
Have knowledge of all material facts regarding the contract
Accept the entire transaction
Have capacity

Question 12

P may ratify anything unless

Answer 12

Performance was illegal; 3P has withdrawn; material change in circumstances

Question 13

3P vs. P liability

Answer 13

P is liable to 3P on a contract entered into by A if A had valid authority to act

Question 14

3P vs. A liability

Answer 14

If A had authority to enter contract for P, or if P ratified a previously unauthorized contract, A cannot be held personally liabile.

Question 15

3P liability to P

Answer 15

Disclosed P: only P may enforce the contract and hold 3P liable

Undisclosed P: either P or A may enforce the contract

Question 16

Two theories under which P may be vicariously liable for torts of A

Answer 16

Respondeat superior; apparent authority

Question 17

When is a P responsible under reasonpondeat superior

Answer 17

Liable for the torts of an employee committed within the scope of the employment

Question 18

Independent contractor

Answer 18

Where P does not have the right to control the manner in which the work is performed

Question 19

Scope of employment

Answer 19

Conduct of the kind A was hired to do; Tort occurred on the job; Conduct in part to benefit P

Question 20

Frolic and detour

Answer 20

Detour is a small deviation. Frolic is a major deviation

Question 21

Intentional torts

Answer 21

Employer may be liable for torts if within scope of employment

Question 22

Apparent authority liability

Answer 22

Where A appears to communicate on behalf of P and A’s apparent authority enables A to commit a tort or conceal its commission