Agency Flashcards
Employee versus Bailee Negligence
Generally, an employer is liable for the negligence of an employee, but a bailor is not liable for the negligence of a bailee with respect to the use of the bailed goods.
How to determine whether within scope of employment
In determining whether an employee’s actions were within the scope of employment, the court will ask whether the employee was about the employer’s business.
If the employee steps aside from his employer’s business and is engaged in an independent venture of his own, the relation of employer-employee is for the time suspended.
The test is whether the act complained of was done in the course of employment or outside of it.
An act is done within the scope of employment if it is something fairly and naturally incident to the business, if it is done while the employee is engaged upon the employer’s business, if it is done, although mistakenly or ill-advisedly, with a view to furthering the employer’s interest, and if it does not arise wholly from some external and personal motive of the employee to do the act upon his own account.
The fact that an act was forbidden by the employer or performed in a manner forbidden by the employer does not remove it from the scope of employment.
Requirements of respondeat superior
To hold an employer liable for its employee’s acts under the doctrine of respondeat superior, an injured party is required to establish that the relationship of employer-employee existed at the time and with respect to the specific action out of which the injury arose.
Lunch break and scope of employment
Ordinarily, an employee’s conduct while on a lunch break is conduct that falls outside the scope of employment. After lunch, the employee does not reenter the scope of employment until he returns to the place of employment.
Third party and disclosed agent contracts
A third party dealing with a disclosed agent contracts with that agent at his peril; he has a duty to ascertain the extent of the agent’s authority.
If the agent exceeds her authority, the principal is not bound by the agent’s act.
When will principal be bound by agent’s acts?
A principal will be bound by the act of an agent if the agent had actual or apparent authority to act on the principal’s behalf.
Actual authority
Actual authority is authority that an agent reasonably believes she has based on her dealings with the principal. It includes all authority that the principal expressly grants to the agent plus authority that the agent reasonably can imply from the express grant.
Apparent authority
Apparent authority is authority that a third party reasonably believes an agent has based on the principal holding out the agent as having such authority.
When a principal places an agent in a position that carries with it customary responsibilities, the principal is liable for the agent’s acts that come within these customary responsibilities, even though the agent had no actual authority to perform the acts.
Instructions from the principal to the agent limiting the agent’s power have no effect on such authority unless the third party is informed of the limitation.
Ratification
To ratify a contract, a principal must know all the material facts regarding the contract and then accept the benefits of the contract.
Ratification occurs when a principal knowingly adopts a signature as her own or when, with full knowledge of the circumstances, she appropriates the benefit of the unauthorized signing or fails to deny the validity of the signature, knowing her silence may mislead others.
Duty to notify
An agent has a fiduciary duty to notify the principal of all matters that come to the agent’s knowledge affecting the subject of the agency.
Remedies for agent’s breach of fiduciary duty
When an agent breaches his fiduciary duty, the principal may, in addition to any other remedies she has, withhold compensation.
The general rule in Virginia is that a party is responsible for her own attorneys’ fees. However, when an agent breaches his fiduciary duty, he is liable to the principal for damages suffered by the principal as a result of the breach.
Subagent
Normally, when an employee retains another to assist him in doing his job, the third party so retained does not become an employee of the employer for vicarious liability purposes unless the employee was authorized to retain the subservant.
Authority to retain a subservant
Authority to retain a subservant may be express or it may be implied; it may be implied from the circumstances if an employee is asked to perform a job that he cannot handle alone without obtaining assistance.
Use of force in connection with duties
When an employee is given authority to use force in the conduct of his duties, the employer will be held liable for any improper (negligent) or intentional but excessive use of force by the employee.
Ratification
Ratification may be express or implied through the conduct of the principal. Such conduct would include acceptance of the transaction’s benefits when it is still possible to decline, silence if there is a duty to disaffirm, and suing on the transaction.
