Agency Flashcards
An agency relationship is created by
Assent, benefit and control. The ABC’s of Agencies. * An Agency relationship is created when a principal manifests assent to an agent, the agent acts on the principal’s behalf, the actions are subject to the principal’s control, and the agent manifests assent (consents by words or actions).
An agent requires ____ capacity.
Minimal. Agents that are minors or handicapped can still be agents (right to work)
Do you need a writing or consideration to form an agency relationship?
No. Agency relationships are often informal or verbal. “Please take my keys and pick up my laundry” = Authority, benefit, and control.
A principal is liable to third parties for contracts and torts of the agent if there is
Authority: actual ((1)express or (2)implied) or (3) apparent (4) Estoppel (5) Or Ratification.
* An agent acting within his scope of authority will bind the principal to the contract. Discuss each type of agency and decide whether one exists.
- Note: a different rules exists for torts (scope of ______).
A principal is liable for an agent’s torts if?
The agent has acted within the scope of agency (Actual, implied, or apparent). Usually, this means the agent is acting within the scope of his employment, but not always.
When can An agent be liable as a party to a contract? (directly liable)
The identity of the principal is not disclosed.
* Agent discloses that he has a principal, but does not say who.
Agents have what duties?
Duty of care and a duty of loyalty. Agents are the fiduciary of the principal, and must therefore act in the best interests of the employer, and exercise due diligence in performing those duties. This generally means the agent cannot serve another employer with competing interests.
* this can be more easily articulated as: the duty to exercise reasonable care (i), the duty to obey reasonable instructions (ii); duty of loyalty (iii).
Principals have what duties?
Duty not to interfere and duty to indemnify A for losses for actions taken within the scope of agency.
Describe the duties of loyalty, care, and obedience, and when those duties are breached?
The duty to exercise reasonable care; the duty to obey reasonable instructions, the duty to be loyal (not usurp business opportunities or take in secret profits).
Explain vicarious liability & how it applies to the ageny relationship?
Generally for respondeat superior to apply, the principal must have sufficient control over the agent such that the relationship is “employer-employee” and (2) the tort must be committed while acting within the scope of employment.
* Note: A principal is generally not liable for torts of independent contractors.
How does one determine if an agent is acting within the scope of their employment, and what is the impact if the agent is an independent contractor?
An agent is acting within the scope of employment if: (1) the act is performed to benefit the principal, (2) the work was of the kind the agent was hired to perform; (3) the tort occurred on the job (within the normal bounds of employment- time and place)
*An independent contractor is one where the employer (principal) has substantially less control over the employee (agent). So, analyze how much control the IC has over his actions (exercise his own judgment?) and then settle on a conclusion.
* Principals are generally not liable for the torts of an independent contractor (they are independent after all).
Explain the concept of frolic and detour, and how this affects whether the agent is acting within the scope of employment
A frolic is a significant deviation from the assigned path or action (going to McDonalds while required to guard a gate), whereas a detour is a minor deviation from the assigned path that was within the scope of employment (going to MCDs on one’s lunch break– or arguably during a 15 minute break?). Also, bouncing a basketball while waiting for a shipment on the dock (arguably within scope)
** Thus, a frolic is outside the scope, while a detour is within the scope of employment
Describe and differentiate actual, implied, and apparent authority (1-3) . Additionally, even if no authority exists, the transaction may be enforceable via estoppel or ratification (4-5) (Briefly describe these concepts)
- *Express**: Principal tells the agent directly that he has the authority to act (P-A)
- *Implied**: When the agent reasonably understands that certain actions are necessary to perform the desired function (Make sure my room is clean– implied authority to buy cleaning products, etc)
- Apparent**: When a principal’s manifestations to a third party cause that party to *reasonably believe that the agent has authority to act (no authority if principal is undisclosed!!).
Estoppel: When the principal is “estopped” from denying liability due to failure to take reasonable steps to inform the third party that the agent has no authority (3rd party detrimentally relies).
Ratification: when the principal affirms an act performed by an agent, even if the act was outside the agent’s authority.
