Agency Flashcards
(24 cards)
Agency (nature)
Agency relationship is fiduciary in nature
Agency Elements (2)
(1) agent consents to act on principal’s behalf AND
(2) is subject to principal’s control
Agent (2)
(1) person acting on behalf of another
(2) acting to primarily benefit the principal
Principal
A person for whom the agent is acting on behalf of. (must be competent adult)
Termination
An agency relationship terminates upon the agent’s breach of fiduciary duties– including duty to put interests of principal first
Traditional Control Rule
limited partner who moves towards management, loses shield of limited liability.
Tort Liability
Principal is subject to vicarious liability for torts committed by employee while acting within the scope of their employment
Independent Contractor
a person who contracts with another to do something but who is not controlled by the other with respect to physical conduct
Ind Contractor - Tort Liability
Principal not liable except for inherently dangerous activities or non-delegable duties
Contract - Disclosed Principal
at time of transaction, 3rd party had noticed that the agent was acting on behalf of a principal but had notice or should reas. infer the principal’s identity
Contract - Disclosed Principal
Third Party to Principal
3rd party liable to principal if agent acted with authority and principal is not excluded by the form or terms of contract
Contract - Disclosed Principal
Agent to 3rd Party
Agent no liable since the agent is not actually a party to the contract
Contract - Partially Disclosed Principal
at time of transaction, 3rd party had notice that the agent was acting on behalf of a principal but does not who principal is
Contract - Partially Disclosed Principal (same as disclosed)
Third Party to Principal
3rd party liable to principal if agent acted w/ authority and principal is not excluded from terms of the contract
Contract - Partially Disclosed Principal
Agent to Third Party
Agent is a party to the K and is liable since the principal is unknown and can’t be investigated for solvency or reliability
Contract - Undisclosed Principal
At time of transaction, 3rd party had no notice that the agent was acting for a principal
Contract - Undisclosed Principal
Third Party to Principal (4)
3rd party liable to principal (1) if agent acted with authority, (2) principal is not excluded from terms of K, (3) the existence of the principal was not fraudulently concealed, and (4) there is no similar defense against agent.
Contract - Undisclosed Principal
Agent to Third party
(same as partially disclosed)
The agent is a party to the contract and is liable since the principal is unknown and can’t be investigated for solvency or reliability.
Agent Acts with Authority
Principal will be liable on a contract between agent and 3rd party when agent acts with authority
Authority - Actual
manifestation by a principal to an agent that agent has power to deal with other as a representative of the principal
Authority - Implied Actual
The agent believes that there is power to deal with others as a representative of the principal based on a prior course of conduct
(conduct to agent)
Authority - Incidental
The agent has the authority to do the incidental actions that relate to the transaction.
Authority - Apparent
When the principal’s words or conduct to third party would lead a reasonable person in the third party’s position to believe that the agent has authority to act on the principal’s behalf.
Authority - Doctrine of Estoppel
When the principal contributed to a third party’s belief that an agent had authority but failed to dispel it
