Agency

Question 1

Agency law is about asking…

Answer 1

When is one party responsible for the actions of another and what rights and obligations do those parties have to one another. (Acing5)

Question 2

What is the first question to resolve when faced with a fact pattern in which one person is acting on behalf of another?

Answer 2

Is whether a principal-agent relationship exists. (Acing 5)

Question 3

What is Agency, defined?

Answer 3

Agency is the fiduciary relationship that arises when one person (a principal) manifests assent to another person (an agent) that the agent shall act on the principal’s behalf and subject to the principal’s control, and the agent manifest assent or otherwise consents so to act. (Acing 5)

Question 4

3 Parts of Agent Definition

Answer 4

1. Manifestation of consent by the principal that the agent act on the principal’s behalf;
2. Subject to the principal’s control;
3. The agent manifest consent to that control. (Acing 5)

Question 5

In order to create an agency there must be some form of…

Answer 5

Agreement or understanding between the parties, but not necessarily a contract between the parties. (Acing 6)

Question 6

How do you prove the existence of an Agency?

Answer 6

Evaluation of the facts in each situation/case. (what parties said or did, how they acted, course of dealings, even silence. (Acing 6)

Question 7

Who are the players in an Agency?

Answer 7

Principal / Agent / 3rd Party (Acing 6)

Question 8

What do we want to know in Agency?

Answer 8

The rights and responsibilities of the parties to each other (Acing 6)

Question 9

Principal Responsibility and Agent Tort

Answer 9

The principal is responsible for tortious acts committed by the agent that fall within the scope of the agency (Acing 6)

Question 10

Does the Agent have the authority to enter into binding agreements on behalf the principal?

Answer 10

Yes. The agent has the ability to enter into binding agreements on the principal’s behalf, as long as the agreement may be traced to the principal’s authority. (Acing 6)

Question 11

Fact patterns in Agency that involve a Tort.

Answer 11

In a tort context, we are typically looking to determine, WHO is responsible for a wrongful act or for harm done. (Acing 6)

Question 12

Fact patterns in Agency that involve a Contract.

Answer 12

In a Contract context, we are typically looking to determine WHO is bound. (Acing 6)

Question 13

When a tort occurs in an Agency context, what is the question?

Answer 13

The question is: Whether the Principal is responsible for the Agent’s tort. (Acing 7)

Question 14

What if an Agent is negligent?

Answer 14

Agent is always personally responsible for his own tort. (Acing 7)

Question 15

What is the question in Agency Law in Torts?

Answer 15

Whether the Principal may be found liable for the tors of an Agent, even though the Principal was not negligent. (Acing 7)

Question 16

Whether a Principal is responsible for the wrongdoing of an Agent depends on what?

Answer 16

Depends upon the nature of the principal-agent relationship. I making this analysis, one must first determine whether an employer/employee relationship existed. (Acing 7)

Question 17

Why is it critical to determine if the agent was an employee of the principal?

Answer 17

Because the Principal is liable for the torts committed by its employee within the scope of that employee’s employment. (Acing 7)

Question 18

When evaluating whether an agent is an ‘employee’ for the purposes of Respondeat Superior, one must….

Answer 18

Assess whether the Principal had the right to exert control over the manner and the means by which the agent performed his duty. (Acing 7)

Question 19

Factors for determining if Principal had the right to exert control are?

Answer 19

Extent he parties agreed to;
Whether the Agent is engaged in a distinct occupation or business;
Customarily done under Principal’s direction?’
Skill required of Agent occupation;
Agent paid by job or by time worked;
Agent’s work part of the Principal’s regular business?;
Do both parties believe they are creating an Agency Relationship?;
Whether Principal, is or is not in business. (Acing 8)

Question 20

Apparent Authority

Answer 20

Is the power to effect the legal relations of the Principal in transactions with 3rd Parties and professing themselves as Agents. (Aud2)

Question 21

Authority

Answer 21

The power of the Agent to affect the legal relations of the Principal by the Principal’s manifestation of consent to him. (Aud2)

Question 22

Implied Authority

Answer 22

Agent has the authority to do what is reasonably necessary to get the job done even if the Principal did not spell this particular detail out. (Aud2)

Question 23

What are the factors for Apparent Authority?

Answer 23

A manifestation to a 3rd Party which is attributable to the Principal and leads the 3rd Party to reasonably conclude that the Agent is an Agent for the Principal.
**No Detrimental Reliance needed! (Aud2)

Question 24

How is Agency Defined?

Answer 24

Agency is determined by conduct and not necessarily words. (Aud2)

Question 25

How do you determine if there is an Agency Relationship?

Answer 25

The requirements are; MANIFESTATION OF CONSENT by the Principal to another-the Agent, that the Agent shall ACT on Principal’s behalf, SUBJECT to the Principal’s control, with CONSENT by the Agent to act. (Aud2)

Question 26

What must the Agent do in the Role as an Agent?

Answer 26

If there is an Agency Relationship, the Agent:
1. Owes a Fiduciary Duty to the Principal when the Agent is discharging their acts;
2. Duty of Loyalty
3. Duty to Exercise Reasonable Care
4. Obey all instructions of Principal
5. Make full disclosure (Aud2)

Question 27

Agency - What type of Duty does the Agent owe to the Principal?

Answer 27

Fiduciary Duty when the Agent discharges their acts.

Question 28

Are Independent Contractors considered agents for purposes of Agency Law?

Answer 28

Independent Contractors usually are not agents. (Whit462)

Question 29

Name some of the duties of an Agent?

Answer 29

Fiduciary duty of loyalty;
Forward all profits;
Cannot take advantage of agency opportunity;
Cannot deal with Principal as an adverse party;
Duty to obey;
Use reasonable skill and care;
Duty to inform on all matters;
Keep all monies, property and accounts of Principal safe. (Whit)

Question 30

Independent Contractors

Answer 30

Agree to only accomplish certain results;
Responsible only for their final products;
Hired by the job;
Employer does not control the details of performance. (Whit)

Question 31

Who can become an Agent or a Principal?

Answer 31

Anyone having capacity to consent can become a Principal or an Agent. (Whit)

Question 32

Are formalities required to create an Agency?

Answer 32

Generally, no formalities are required to create an Agency. (Whit467)

Question 33

When and under what circumstances may an Independent Contractor become (turn into) an Agent?

Answer 33

If the Employer retains control over the details of performance.
*Depends on the degree and character of the control retained by the employer over the work done and no absolute dividing line can be drawn between the two. (Whit454)

Question 34

Implied Authority Defined

Answer 34

It is impossible to express every detail of the agent’s authority. For example, if a storeowner hires someone to mange the business, it is impossible to describe every single management function. (Whit470)

Question 35

How do we determine if Implied Authority exists?

Answer 35

1. The Principal’s practices with other agents in similar situations;
2. Earlier experiences of the Principal and the particular agent;
3. Customary trade usages. (Whit470)

Question 36

Apparent Authority

Answer 36

Is based on acts or conduct of the Principal that show a 3rd person that the Agent has actual authority and on which the 3rd person justifiably relies (either by words or actions). (Smith646)

Question 37

What the Duties of the Agent to the P?

Answer 37

-Duty of Obedience
-Duty of Diligence
-Duty to Inform
-Duty to Account to
-Fiduciary Duty

Question 38

How do you Terminate an Agency?

Answer 38

-Acts of the parties
-Lapse of time
-Mutual agreement
-Fulfillment of purpose
-Revocation of authority
-Renunciation by Agent
-Operation of law
-Bankruptcy
-Death / Incapacity
-Loss/Destruction of subject matter
-Changes in the law
-Loss of qualification of A or P. (Smith647)

Question 39

Is the Principal bound by Apparent Authority?

Answer 39

Thus, when there is Apparent Authority by Not Actual Authority, the Principal is nonetheless Bound by the act of the Agent. (Smith648)

Question 40

What happens when the Agent exceeds his Actual Authority?

Answer 40

By exceeding his Actual Authority, the Agent has violated his Duty of Obedience and lies liable to the Principal for any loss sustained as a result of his ‘Acting in Excess’ of his Actual Authority. (Smith648)

Question 41

What does the appointment of an Agent reflect?

Answer 41

The appointment of an Agent reflects confidence and reliance of the Principal on the Agent’s personal skill, integrity and other qualifications. She is selected because of her fitness to perform. (Smith649)

Question 42

Does an Agent that makes a contract with a 3rd party have any rights of action if the 3rd party breaches the contract?

Answer 42

An Agent who makes a contract with a 3rd party on behalf of a Disclosed Principal has No right of action against the 3rd party for breach of contract. (Smith650)

Question 43

Apparent Authority

Answer 43

What a 3rd party reasonably believes the Principal has authorized the Agent to do. Manifestations between the Principal and the 3rd Party.

Question 44

AGENCY Defined

Answer 44

The Manifestation of Consent by the Principal
-that the Agent Act
- on his behalf and -Subject to his Control and the
-Agent Manifests consent to do so.