Learned from MEE Model Answers Flashcards
In the absence of actual or apparent authority, it is irrelevant whether the agent
disclosed to the third party that the agent was acting on behalf of a disclosed principal.
Must be the P, not the A, that tells/manifests to 3P that A acting on P’s behalf, in order to get apparent authority
Apparent authority is created with respect to a third person when
“by written or spoken words or any other conduct” the principal causes the third person “to believe that the principal consents to have the act done on his behalf by the person purporting to act for him.”
the 3P’s belief must be traceable to the P’s manifestation.
If A mistakenly enters K on behalf of P, but didn’t have actual or apparent authority, is A liable?
YES.
A person who “purports to make a contract . . . with a third party on behalf of another person, lacking power to bind that person, gives an implied warranty of authority to the third party and is subject to liability to the third party for damages for loss caused by the breach of that warranty, including loss of the benefit expected from performance by the principal.”
When A binds P with actual authority but, but 3P doesn’t know who P is and A doesn’t mention that A is acting on behalf of P (ie undisclosed P), is P liable?
What about the A
1) YES, P liable
“An undisclosed principal is bound by contracts . . . made on his account by an agent acting within his authority.”
2) YES, A liable too
An agent who purports to act on his own account, but in fact is making a contract on behalf of an undisclosed principal, is also a party to the contract.
Note however, that P is primarily liable and A is a surety for that obligation (3p could sue either and if recovered from A, A may be able to recover from P)
Some juris’ require 3P to “elect” who they want to recover from, and if they don’t, A or P can demand “election” by 3p
Other juris’ allow 3p to recover from both and don’t have to elect
When A acts without any authority to get something for P, and then P uses the items but refuses to pay, then what?
P has effectively “ratified” the K and is liable to pay
Ratification occurs if the principal’s conduct “justifies a reasonable assumption that” the principal consents to the act performed on the principal’s behalf.
Where the principal ratifies the act of an agent, the principal is liable on the contract just as if the agent had acted with actual authority.
When a third party contracts with a person that the third party knows is acting in an agency capacity for another but the third party is unaware of the identity of the principal, the principal for whom the agent acts is called a…
Who is liable for K in this situation?
“partially disclosed principal.”
both A and P are liable for K’s
A partially disclosed principal can be liable on a contract entered into by an agent who had actual or apparent authority.
Unless the agent and the third party agree otherwise, an agent acting on behalf of a partially disclosed principal is a party to the contract if the agent acted with actual or apparent authority.
In juris’ that follow election R, not applicable here for partially disclosed P, so 3P would not have to elect A or P, can sue both to recover
