Review

Question 1

What are the elements of an agency relationship?

Answer 1

(1) Assent: formal or informal agreement
(2) Benefit: conduct primarily benefits the principal, and
(3) Control: Principal has right to control the agent

Question 2

How does an agency relationship terminate?

Answer 2

(a) by either party manifesting intent to discontinue
(b) specified terms of authority expires
(c) death of principal or agent, or
(d) incapacity of principal or agent

Question 3

Result of Death of Principal (CL vs some states)

Answer 3

CL: relationship revoked whether or not third party has notice
Some states: not revoked until third party has notice

Question 4

Actual authority

Answer 4

A principal is bound to a contract entered into by its agent if the agent had actual authority

Question 5

What are the two types of actual authority?

Answer 5

Express and Implied

Question 6

Express Authority

Answer 6

Agency relationship created by principal’s explicit directions to the agent (orally or in writing)

Question 7

Implied Authority

Answer 7

Either

(a) Action is necessary to carry out agent’s expressly authorized duties;
(b) agent acted similarly in prior dealings between principal/agent; OR
(c) Customary for agent in that position

Question 8

Apparent authority

Answer 8

A principal is bound to a contract entered into by its agent if the agent had apparent authority

Question 9

When does apparent authority occur?

Answer 9

1) 3rd party reasonably believes agent has authority to act on behalf of the principal; &
2) Belief is traceable from principal’s manifestations

Question 10

Ratification

Answer 10

Principal is liable for agent’s contracts entered into without authority if they ratify contract

Question 11

When does ratification occur?

Answer 11

when Principal

1) Has knowledge of material facts or contract terms; &
2) Assents to the same through words or conduct

Question 12

When is an agent NOT liable for a contract?

Answer 12

When they 1) fully disclose principal to third party; and 2) act within scope of authority

Question 13

When is an agent liable for a contract?

Answer 13

If

a) Conduct was unauthorized; or
b) Principal was undisclosed to the third party, or partially disclosed (no name given)

Question 14

When is an employer liable for negligence of its employees?

Answer 14

When the employee was acting within the scope of employment

Question 15

Scope of Employment factors

Answer 15

i) Conduct is of the kind employee is employed t o perform
ii) occurs substantially within authorized time and space limits
iii) motivated in whole or in part to serve employer

Question 16

When is employer liable for employee’s torts even if outside the scope of employment?

Answer 16

a) ER intended the conduct;
b) ER was negligent in selecting, training, supervising, or controlling employee
c) non-delegable duty; OR
d) agent had apparent authority upon which 3rd party reasonably relied

Question 17

Is an employer liable for intentional torts of its employees?

Answer 17

In general, no.

Question 18

When is an employer liable for intentional torts of its employees?

Answer 18

A) Act was expressly authorized;
B) Act was natural product of agent’s duties; or
c) Act was motivated by a desire to serve the principal

Question 19

When is an employer liable for an independent contractor’s torts?

Answer 19

1) Inherently dangerous activities
2) Non-delegable duty
3) Estoppel (principal holds out contractor as agent, 3rd party reasonably relies on contractor, suffers harm)

Question 20

EE vs. IC factors

Answer 20

i) type of work
ii) pay rate
iii) who supplied equipment/tools
iv) degree of supervision
v) degree of skill
vi) was work for benefit of ER’s business
vii) extent of control principal has over work details
viii) whether agent/contractor is engaged in a distinct business

Question 21

What duties does an agent owe to the principal?

Answer 21

Care; Loyalty; Obedience