Agency Principles (tested in Corps and Partnerships) Flashcards
When can an agent bind a principal to a contract?
Where the agent acts with actual or apparent authority or the principal subsequently ratifies the contract
July 2015
When is actual authority present?
When either express or implied, and based on the principal’s communications with the agent and the agent’s reasonable belief that he is authorized
July 2015
When is apparent authority present?
Where a third party reasonably believes, based on manifestations of the principal, that the agent is authorized
* Arises out of the principal’s holding out of the agent as authorized
July 2015
How may a principal ratify a contract?
Must know the material terms of the contract, or be aware of his lack of knowledge
* Silence may constitute ratification where a person would ordinarily be expected to speak
* BUT a principal cannot avoid ratification by relying on his own ignorance of the contract terms where deliberately ignorant of the terms
July 2015
What is respondeat superior?
An employer is liable for the torts of his employee that are committed within the scope of employment
* Includes detours (minor deviation) but not frolics (major deviation)
July 2015
Where employer found liable under respondeat superior, can they recover from employee?
Yes–through indemnification
July 2015
What facts must an agent disclose to her principal?
All material facts
July 2016
