NY Agency & Partnerships Flashcards
Agency questions tend to focus on three areas
- P’s liab to TP for agent’s torts
- P’s liab to TP for K’s entered into by agent
- Duties an agent owes to P
Be prepared to (1) identfy existing agency relationships, (2) demonstrate an agent’s fidcuariy obligation to P, and (3) detail when agency relationshiop terminates
Creation of Agency relationship (KNOW IT COLD!)
TWO PART TEST: (1) When P “manifests assent” to an agent that (a) agent act on P’s behalf and (b) subject to P’s control, AND (2) Agent manifest assent.
“control” - here, means overall objectives
three types: expression (appt), implication (conduct), misinterpretation (P’s fault)
Reqs to be P; to be A
Principal - must have legal capacity to possess rights and incur obligations.
NB - Unincorporated Ass'n cannot serve as Principals
Agent - any person with mininal capacity (ie, the ability to consent to act on P’s behalf) or any entity can serve as agent.
Recurring, 3
ER - EE
Corp - officers…. BUT corp not in existence cannot be a P!
Partnerhsip - partner
Agent Vocabulary, 5
Gratuitous agent - no compensation (bert/ernie)
General agent - broad authority (restaurant manager)
Trustee as agent - (agent of settlor or beneficiaries)
Special agents - limited authority over specifci acts. Many examples:
1. Broker titles: (a) buyer’s agent, (b) listing agent, (c) seller’s agent, (d) dual agent, (e) designated sales agent” i.e. designated wehn there’s a dual agent, (f) broker’s agent (NOT A SUBAGENT TO ULTIMATE P!), (g) tenant’s agent, (h) LL’s agent. REQS: brokers must (1) be licensed!, (2) disclose to P fiduciary duteis
Subagents - as it sounds
Subagent rules
Agent may only appoint if actual or apparent authority to do so
SA owes DOL to P and A
Contract liab: a is responsible to P for losses by SA; P is bound by SA to the same extent as if A acted; A can be VL for SA
Terminating Agency Relationship
Can be done by either side (P or A), ie it’s a unilateral right. [True, even if longer term in K, but there will still be breach of K]
Ways P-A terminates:
- Expiration of time (express or reasonable period), eg snow shoveling
- Revocation, renunciation - effective when other party recieves notice
- Operation of Law (automatic) in three circumstances (a) death of principal or agent , (b) P’s loss of capacity, and (c) A’s breach of fidicuary duty. EXCEPTIONS: (i) if P in military when dies, (ii) bank customer; OR (iii) if “durable power of aty given, in writing”
NB: irrevocable? agreement with security.
OJO: P liable for terminating?
Look to see if there was an act of breach by the Agent!!!!
P’s K Liability, general rule
Principal bound if Agent acted with (1) actual auth, (2) apparent auth, or (3) inherent auth.
Actual Auth (P’s K Liability)
Actual authority - Based on the manifestations of P’s intent, Agent must actually and reasonably believe that he is acting doing what the P wants. Both an objective and subjective component.
Express or implied
Implied - if necessary to other objectives etc. Consider: (1) custom and usage, (2) P’s acquiescence.
Sometimes can be implied to delegate: same basic analysis
Implied actual authority to delegate (P’s K Liability)
NOT IMPORTANT SKIP
Use common sense. But also 4 scenarios:
- delegation is ministerial
- agent required to delegate to specailist under law
- delgation is consistent with custom /usage
- impossible for agent to perform
Actual authoirty - P’s intent?
P’s K Liability
P’s subjective intent is IRRELEVANT! only A’s good faith and objectively reasonbale understanding of P’s intent
Terminating Actual Authority, 8 ways
P’s K Liability
- revocation
- agreement
- change in circumstnaces (coconut allegy)
- passage of time
- principal’s death
- agent’s death
- p’s loss of capacity
- termination req’d by statute
Test for Apparent Authority
P’s K Liability
Does a THIRD PARTY with whom an agent is dealing have a reasonable and good faith belief that the agent is acting with authority? (subjective and objective)
Based on PRINCIPAL’s actions.
Five factors, but really pretty basic: (1) past dealings between p and a, (2) trade customs re transactions, (3) relevant industry standards, (4) P’s written statemnt of authority, (5) transactions taht wouldn’t benefit P . ALL THESE FACTORS GO TO THE GOOD FAITH OF THE THIRD PARTY!
Ratification and Estoppel (P’s K Liability)
Ratification (express or implied) making action by unauthroized agent valid. FOUR factors: (1) knowledge - P must know ALL material facts; (2) comprehensiveness - have to ratify all or nothing, no selective ratification; (3) timeliness - P must ratify in timely manner, can’t prejudice TP; and (4) capacity - can only ratify if P has capactiy to do actions.
Estoppel - when P’s negligence is the reason that someone thought the A had apparent authority (NJ furniture store not policing its registers)
Respondeat Superior (P’s tort liability)
Two reqs: (1) master-servent relationship; and (2) servent was acting in the scope of employment.
Master-Servent (Respondeat Superior)
Subset of P/A. Amount of CONTROL is more stringent. Need control over DAY-TO-DAY functioning of agent.
Scope of employment, vocab and factors-5 (Respondeat Superior)
FROLIC (not in scope of employment) vs. DETOUR (in scope).
NY Courts look at 5 factors: (1) whether activitiy closely connected to the servent’s work for the master; (2) when the activity is common to servants; (3) history of relationship btw M and S; (4) if servant departs from the normal methods of pursuing his or her duties; (5) how reasonably foreseeable was it that EE would act this way!
Commute to work is NOT within scope
K liability for Agent, generally
Is P disclosed, partially disclosed, or undisclosed?
disclosed (identity, too): then agent is NOT liable
partially disclosed (no identity): then agent IS liable
undisclosed: agent IS liable
Difference btw partially disclosed and undisclosed
TP is stuck with K if partially disclosed; TP can back out of K if undisclosed.
