Agency Flashcards
Agency defined
Agency is a fiduciay relationship where one person acts on another person’s behalf in a relationship of trust and confidence.
Who can be a principal
Individual and/or business organization
Types of Principal
Disclosed - where 3rd party knows both existence and identity of principal
Partially disclosed/unidentified - where 3rd party only knows existence, but not identity
Undisclosed - 3rd party doesn’t know either.
IF NO DISCLOSURE: 3rd PARTY CAN HOLD AGENT LIABLE.
Types of Agents
General agents - ones who are given authority to conduct a serious of transactions on behalf of Principal
Special agents - authorized to conduct one transaction, or a particular serious of transactions (auctioneer is special sales agent to sell good within auction terms)
Subagents - agents of the agent. Also agent of the principal. Principal still directly liable
Creation of Agency
1) both parties must specifically assent
2) agent must agree to act on behalf of principal (compensation NOT required)
3) agent must act under the control of the principal. (the more control, the more likely to be liabile)
Duties of Principal to Agent
1) Duty to compensate the agent for services rendered
2) To indemnify the agent for any liability that results in good faith performance
3) Reimburse the agent for expenses incurred in the scope of the agency
Generally: an agent is not bound personally on transactions w/3rd parties if acting on behalf of the principal in scope of agency.
Duties of Agent to Principal
SO DICK
Generally: an agent is not bound personally on transactions w/3rd parties if acting on behalf of the principal in scope of agency.
Duty of care w/duty to
1) perform the K and render services w/reasonable care.
2) obey principal in all reasonable directions unless illegal
3) act only within the scope of actual authority
4) ) act with care, competence & diligence normally exercised by agents in similar circumstances, & if higher skill, those skils
5) indemnify principal against loss caused by agent’s wrongful behaviour/failure to act w/reasonable care
Authority of the Agent
Actual Authority - express authority created by the manifestation of the principal to the agent of the principal’s request that the agent act with the benefit of the principal in a particular way. Construed from objective perspective of the agent. If agent acts within scope, principal is bound.
Apparent authority - based on principal’s manifestations made not directly to agent, but to a 3rd party. Base on what 3rd party reasonably believes. (Follow up question of whether P can bring action agaisnt Agent for breach of authority)
Equal Dignity Rule
If the K that the agent is entering into needs to be in writing under the SOF, then agency agreement needs to be in as well.
Employer - Employee
Employer (master) is a principal who employs an agent to perform services and controls, or has the right to control, the physical conduct of the agent in performances of those services
Employee (servant) - is an agent employed by the employer to perform services in his affairs whose physical conduct is controlled or is subject to the right of control by the principal.
All employer/masters are princiapls, but not all principals are employer/masters.
All employee/servants are agents, but not all agents are employee/servants.
Independent Contractors
An IC can be an agent. Question is also if he is also an employee/servant. Focus on whehter principal has the right to control HOW they do what they do. If IC is not employee/servant, he can’t bind the principal/employer.
P not responsible for tortious conduct of IC - except inherelty dangerous activities & non-delegable duties
Factors of an IC
1) Extent of control the principal exerts over how the agent performs his work.
2) whether agent is engaged in distinct occupation or business from that of the principal.
3) skill required in the agent’s occupation
4) length of time engaged by principal
5) whether agent is paid by the job or by hour
6) whether the principal and agent inteded to create an employment relationship.
Liability
Generally: an agent is not bound personally on transactions w/3rd parties if acting on behalf of the principal in scope of agency.
If agent breaches duty of loyalty, P is entitled to the profits. Punitive may be awarded.
Agent is liable to a 3rd party only in a situation involving an undisclosed or partially disclosed principal.
Respondeat Superior
Only in employer/employee situations. In SC, employee will always be responsible for their own torts. This is IN ADDITION TO liability for the tortfeaser. Employer/employee are jointly and severally liable.
Requirements:
1) agent must be an elevated agent, an employee, and not just near agent or IC
2) employee must have been acting within scope of employment
Test for scope of Employment
1) if performing tasks assigned in a course of conduct subject to the employer’s control
2) In SC, if the servant is doing some act in furtherance of the master’s business he will be regarded as actign within the scope of his employment
3) But if the servant acts for some independent purpose for his own, wholly disconnected with the furtherance of his master’s business, his conduct falls outside the scope of his employment
4) Torts committed by the employee on the way to or from work are outside the scope of employment.
