Pg 3 Flashcards
What are an agent’s duties to the principal?
An agent is a fiduciary for anything within the scope of his agency. He must use care, competence, and diligence that would normally be used by an agent in similar circumstances. If he has special skills or knowledge, he must act with the care, competence, and diligence of an agent with that skill or knowledge level.
What are the different things that an agent has a duty to act loyally and carefully with regard to?
– being accountable to the principal for profits that come from a transaction.
– act for the benefit of the principal and not himself or anyone else.
– not treat the principal as an adverse party
– not compete with the principal for agency things.
– not use the principal’s property for his own or a third-party‘s purposes.
What is involved in the duty to disclose information for an agent?
Agents must use reasonable efforts to give the principal information that is relevant to affairs he is interested with and that the principal would want to know about. I.e.: asbestos in a building
If an agent acts without actual authority, what is his liability?
He is liable for losses that are suffered by the principal
What are the duties of the principal to his agent?
Principles are not fiduciaries, but they must:
- perform their contractual commitments
- not unreasonably interfere with an agent’s work
- act fairly and in good faith toward the agent
- indemnify the agent for expenses or losses from carrying out their instructions
How do you terminate an agent’s power?
– when the obligation of the relationship is achieved, the authority naturally terminates
– principal or agent dies
– principal revokes
– agent renounces
What is the difference between how the ROA2 and the ROA3 approach tort liabilities within an agency relationship?
– ROA2: uses master/servant and independent contractor terms
– ROA3: employee is an agent whose principal controls the manor and means of his performance
What are the three main roles within agency tort liability for the ROA2?
– master
– servant
– independent contractor
What is a master for tort liability for the ROA2?
This is the principal. He employed the agent to perform services and he controls the agent’s performance of the services.
Under the ROA2 approach to tort liabilities, what is a master liable for?
Torts done by his servant within the scope of his employment.
What is a servant under the ROA2’s tort liability approach?
The agent is the servant, employed by the master (principal). He is being controlled by the other person to get certain results.
What is an independent contractor under tort liability for the ROA2 approach?
Someone who contracts with someone else to do something for him, but he’s not controlled by the other person or subject to anyone else’s control regarding his performance. He is only controlled by results, not the process. I.e.: the builder of a house - it is up to him how to do the work
What are the only situations that a master/principal would be responsible for an independent contractor’s work under tort liability?
- nondelegable duties that are abnormally dangerous
- torts that were authorized by the principal
- fraud or misrepresentation by the agent
What is the ROA3’s approach to tort liability?
An employee is an agent whose principal controls him or has a right to control the manner and means of his performance. The employer is subject to liability for any torts that are committed by his employee acting within the scope of his employment.
What is the reasoning for respondeat superior?
The idea is to allocate risk because torts by employees are bound to occur and are a cost of doing business. If you make money off of this enterprise, then you should bear the cost of it. The employer is in a better position to absorb those costs and to distribute them to the public, plus this gives him an extra incentive to be very careful in hiring and supervising his staff.
