Agency

Question 1

Power of an Agent

Answer 1

An agent has the power to bind the principal to a contract when the agent acts with actual or apparent authority.

Question 2

Actual Authority

Answer 2

Actual Authority exists when the principal makes a manifestation that causes the agent to reasonably believe that the agent is authorized to act on the principal’s behalf.

Question 3

Principal’s liability for contracts made by an Agent

Answer 3

A principal is subject to liability on a contract if the agent acted with the actual or apparent authority to bind the principal.

Question 4

Express Actual Authority

Answer 4

Express Actual Authority can be created by oral or written words, clear direct and definite language, or specific detailed terms and instructions.

Question 5

For Express Actual Authority to exist Principal’s manifestation must:

Answer 5

Cause the agent to believe that the agent is doing what the principal wants; and
the agent belief must be reasonable

Question 6

Apparent Authority

Answer 6

Apparent Authority exists when 3rd party reasonably relies on manifestations by a principal concerning an agent’s authority to act on principal’s behalf

Question 7

When Principal is liable for a tort committed by an agent with apparent authority.

Answer 7

When the agent’s appearance of authority enables him to commit a tort or conceal its commission.

Question 8

For Apparent Authority to Exist

Answer 8

A third person must believe that the agent acted with actual authority, and such belief must be reasonable and be traceable to a manifestation by the principal

Question 9

Apparent Authority Derives from:

Answer 9

reasonable reliance of 3rd party on the agent’s authority based on the principal’s behavior over a period of time

Question 10

Implied Warranty of Authority to a third party.

Answer 10

An agent purporting to be acting for a principal gives an implied warranty of authority

Question 11

Breach of Implied warranty of authority

Answer 11

If the agent lacks the power to bind the principal, then a breach of the implied warranty has occurred, and the agent is liable to the third party

Question 12

Undisclosed Principal

Answer 12

A principal is an undisclosed principal if the third party has no notice of the principal’s existence.

Question 13

When an agent becomes a party to the contract.

Answer 13

An agent who enters into a contract on behalf of an undisclosed principal becomes a party to the contract.

Question 14

Agent’s liability to a third party

Answer 14

When the agent does not inform a third party of the identity or the existence of the principal, the agent becomes liable to the third party on the contract

Question 15

Election of Remedies Doctrine

Answer 15

Once the third party discovers the principal, the third party chooses either the principal or the agent to hold liable

Question 16

Partially disclosed

Answer 16

A principal is partially disclosed if the third party has notice of the principal’s existence but not the principal’s identity.

Question 17

Agent’s liability for partially disclosed

Answer 17

Unless the agent and third party agree otherwise the agent who enters into the contract on behalf of the partially disclosed principal becomes the party to the contract

Question 18

Vicarious liability

Answer 18

A form of strict liability in which one person is liable for the tortious actions of another.

Question 19

Employer

Answer 19

A person is an employer if the person has the right to control the means and methods by which another performs a task or achieves a result.

Question 20

Employee

Answer 20

Are subject to the right to control of the employer

Question 21

Indepedenat Contractor

Answer 21

Free of employer’s right to control. They decide how to perform and achieves tasks

Question 22

Conduct within the scope of employment

Answer 22

includes acts that the employee is employed to perform or that were intended to profit or benefit the employer

Question 23

Frolic

Answer 23

When an employee’s personal errand involves a significant deviation from the path that otherwise would be taken for the purposes of performing work

Question 24

Detour

Answer 24

Travel by an employee during the workday that involves a personal errand may be within the scope of employment when the errand is merely a detour

Question 25

Ratification

Answer 25

Occurs when the principal affirms a prior act that was done on the principal’s behalf. The principal must:
1) ratify the entire contract
2) have legal capacity to ratify the transaction
3) ratify in a timely manner, and
4) have knowledge of material facts involved