Untitled Deck Flashcards
What is an agency relationship?
A voluntary, fiduciary relationship between a principal and an agent.
What does the principal authorize the agent to do in an agency relationship?
Act on the principal’s behalf and bind the principal.
What are the two main types of agency relationships?
- Gratuitous Agency
- Contractual Agency
In a gratuitous agency, what is the compensation structure?
The principal does not compensate the agent.
Describe the employer-employee relationship.
The employer has the right to control what the employee does and how the employee does it.
In an employer-independent contractor relationship, what does the employer control?
Only what the independent contractor does, not how they do it.
What is ‘agency by estoppel’?
An equitable doctrine that protects a third party from damage or loss when no actual agency exists.
What is required to create an agency relationship?
- Manifestation of the principal’s intent
- Consent of the agent
What is the significance of mutual assent in an agency relationship?
Both parties must have the capacity to offer their assent.
What is agency by ratification?
The retroactive granting of authority for an agent’s earlier unauthorized actions.
What duties do agents owe to their principals?
- Duty of Care
- Duty of Loyalty
- Duty to Account
- Duty of Candor
What is the principal’s duty of compensation?
The principal has a quasi-contract duty to pay the agent the reasonable value of services rendered.
What constitutes the power to bind in an agency relationship?
The agent has the power to bind the principal to contracts entered into on the principal’s behalf.
What is actual authority?
Authority granted by the principal to the agent through direct communication.
Define apparent authority.
Authority perceived by a third party based on the principal’s representations.
What is the doctrine of respondeat superior?
An employer is vicariously liable for torts committed by an employee within the scope of employment.
Under what conditions can a principal ratify unauthorized acts of an agent?
- Principal has knowledge of all material facts
- Principal manifests assent that the act shall affect their legal relations.
What is the liability of agents to third parties?
Agents are liable for harm caused by their negligence or intentional torts, regardless of acting within the scope of the agency.
What is the difference between a fully disclosed principal and a not fully disclosed principal?
- Fully Disclosed: Existence and identity known to third party
- Not Fully Disclosed: Existence known but not identity (partially or undisclosed)
What factors determine whether an employee’s conduct is within the scope of employment?
- Kind of work performed
- Time and space of conduct
- Intent to serve employer’s interests
What is a ‘frolic and detour’ in agency law?
A deviation from the authorized route; slight deviations are a detour, while substantial deviations are a frolic.
What is the principal’s liability on a contract when an agent has actual authority?
Principals are liable when their agents enter into contracts on their behalf with actual authority.
What is the principal’s liability for torts committed by independent contractors?
Generally, principals are not liable, with exceptions for inherently dangerous activities and negligent hiring.
What is the duty of indemnification for agents?
Agents must indemnify the principal against losses caused by the agent’s wrongful behavior.
When are principals liable on contracts with third parties?
When their agents, acting with actual authority, enter into those contracts on their behalf.
Can principals be liable for contracts entered into by agents with retroactive authority?
Yes, even when the agency is created by ratification.
Under what circumstance can a principal be liable when an agent does not disclose their identity?
If, subsequent to the transaction, the third party discovers the identity of the undisclosed principal.
What is the principle of contractual liability arising from an agent’s apparent authority?
A party will be liable as if it were principal when its actions cause a third party to reasonably believe another acts as an authorized agent.
What is an Implied Warranty of Authority?
If a person who purports to contract on behalf of another has no power to act for that other, they are liable for breach of implied warranty of authority.
Is an agent liable to a third party for breach of implied warranty of authority when a principal is bound by apparent authority?
No, the agent is not subject to liability in that case.
True or False: Apparent authority can be applied when the principal is undisclosed.
False.
What must an injured third party have to claim apparent authority?
A reasonable basis for their belief that the purported agent had actual authority.
In which context is the doctrine of apparent authority generally applicable?
Disputes involving contractual liability.
Fill in the blank: The injured party in tort liability is not relying on the tortfeasor’s _______.
actual authority to act as a principal’s agent.
