agency - 2018 Flashcards
(166 cards)
1
Q
What is agency?
A
The agency relationship is a consensual relationship created when one person acts on behalf of and subject to the control of another.
2
Q
what is an agent?
A
A person who acts on behalf of and subject to control of another. (master controls end result)
3
Q
What is an agent’s Agent?
A
A person who acts on behalf of and subject to the control of an agent for another but is not responsible to and does not have the power to create liability for the agent’s principal.
4
Q
What is apparent authority?
A
The power of an agent to bind the principal to unauthorized contracts. Power is created by manifestation of the principal to the third party that are reasonably relied upon by the third party.
5
Q
What is a borrowed servant?
A
When liability for a servant’s torts is shifted from the lending employer to the borrowing employer. Majority jurisdictions require transfer of allegiance employee and control by the employer.
6
Q
What is a business trust?
A
A form of doing business through a trust.
7
Q
What is a co-Agent?
A
When there are two or more agents of the principal. They can be in a vertical or horizontal level of authority but they act on behalf of the principal and not each other.
8
Q
What is Control?
A
To exercise authority over, to dominate, redirect or regulate an agent. Test of control for agency is to control final outcome not the way it is accomplished.
9
Q
What is a disclosed principal?
A
When a third party has notice of the principal’s existence and identity. Agent is not liable because the third party knows who the principal is.
10
Q
What is an employee?
A
An agent working for principal. Principal is vicariously liable for torts committed by the agent and contracts entered into by the agent. Principal has control and right to control the actions of employee.
11
Q
What is an employer?
A
A principal who employs an agent. Principal is vicariously liable for torts committed by the agent. Under agency law a person may be an employer but not be one for other purposes.
12
Q
What is a general agent?
A
An agent authorized to conduct a series of transactions on behalf of principal. IE: manager of a business
13
Q
What is an independent contractor?
A
A person who contracts for work with the principal but is not an agent or employee of the principal. A non-servant agent. Principal may still be vicariously liable for independent contractor if certain elements are met.
14
Q
What is inherent agency power?
A
A doctrine that gives agent the power to bind principal to unauthorized acts beyond the customary doctrines of apparent authority and estoppel if the acts are done usually accompany or are incidental to an authorized transaction.
15
Q
What is an LLC?
A
A limited liability company, it is owned and managed by members and liability is limited to the investor’s investment in the company.
16
Q
What is an LLLP?
A
A limited liability limited partnership. A partnership where the general partners and the limited partners have limited liability.
17
Q
What is an LLP
A
A limited liability partnership is a general partnership where the partners have limited liability.
18
Q
What is a master?
A
A principal who employs an agent to perform services and controls or has the right to control the physical conduct of the agent in the performance of the service.
19
Q
What is on behalf of?
A
An element of agency. Acting primarily for the benefit of another. It carries a fiduciary obligation to the principal.
20
Q
What is partially disclosed principal?
A
When a third party is given notice that the agent is acting on behalf of the principal but the third party does not know who the principal is.
21
Q
what is a partnership?
A
An association of two or more persons who carry on as co-owners’ of a business. Partners become agents of the partnership.
22
Q
What is a principal?
A
The person who the agent’s acts are taken for and who has control over the agent.
23
Q
What is respondent superior?
A
A doctrine which holds the master/principal liable for the acts of the slave/agent. Usually employer/employee relationship.
24
Q
What is a servant?
A
The person who is employed by principal. Principal has right to control conduct in the performance of service. Generally referred to as an employee.
25
What is a sole proprietorship?
When a person carries on a business as its sole owner without formally creating a business. Owner is personally liable for the acts and debts of the company.
26
What is a special agent?
An agent with authority to act for a specific transaction or a specific series of transactions.
27
What is a subagent?
Agent 2 is appointed by agent 1, with the authorization of the principal, to work for agent 1 for principal's benefit. Principal agrees to be the principal to both agents. Agent 1 also agrees to be principal to agent 2.
28
What is an undisclosed principal?
When a third party is not aware of the principal and believes the agent is acting on his own behalf.
29
What is an unidentified principal?
When a third party is aware that a principal exists but does not know the identity of the principal.
30
What is a bailment?
The lawful possession of goods by one who is not the owner.
31
What is a franchise?
A license from the owner of a trademark or trade name permitting another o sell a product or service under the name or mark. Franchisor maintains a certain level of control but franchisee is not an agent of franchisor. Element missing is on behalf of.
32
Does marriage or relation create an agency relationship?
No, additional factors must be met, a marriage or family relationship is not sufficient to establish agency.
33
When can agency arise in a property relationship?
When there are co-owners or in a landlord tenant relationship. Need to meet additional elements, these relationships alone are not sufficient to establish agency.
34
Are director's agents of a company/corporation?
No, directors do not have the power to act on their own and can only act on behalf of the corporation as a board.
35
What are the 3 elements of agency?
agreement between agent and principal
agent acting on behalf of principal
agent acting subject to control of principal.
36
How much must an agent act on behalf of principal?
Agent works primarily on behalf of the principal.
37
Does there have to be a formal agreement to form a principal agent relationship?
No, an agency agreement is created regarding the thing the agent is doing on behalf of the principal not about the agreement itself. It's based on the facts not the writing.
38
Does the agent have to be a fiduciary of the principal?
Agent does not have to be a fiduciary but he can be one.
39
What are the 2 steps in determining if there is a violation of agency?
1 Is there an agency relationship
| 2 did agent violate duty of care
40
Can agency be gratuitous?
Yes, don't worry if the agent was paid, evaluate the 3 elements - agreement, acting on behalf of, principal has control over agent.
41
Is consent required for agency?
parties do not have to consent, it is based on the facts, on their actions in relation to one another
42
Are distributorships agents?
generally not because they are acting on behalf of themselves. They purchase inventory, set prices, make profit and take credit risks.
43
is a bialor bailee relationship agency?
no, person holding something for someone else
44
is franchisor franchisee relationship agency?
no, on behalf of is missing because franchises act in their own interest, control is limited
45
what is the rule for dual agents?
A dual agent can't act on behalf of adverse party to a transaction connected with agency without permission of principal. Can't be adverse to principal, must give full disclosure and get permission from both principals.
46
Is an employee an agent of a customer when he assists a customer?
No, the employee is an agent of the employer and is helping the customer for the benefit of the employer not for the benefit of customer.
47
When there appears to be dual agency, how do you determine who the principal is?
It's a fact question. Look to see who has control over the agent. It is likely to appear agent is acting on behalf of both parties but only one will have control over agent.
48
What are the principals called when there are 2 principals?
remote principal
| immediate principal
49
In a real estate multiple listing service how do you determine the principal that an agent or subagent is working for?
listing is an offer of sub-agency, seller usually the principal and broker is the agent.
can also follow the money, the party paying the commission is the principal.
50
What affect do a written agreement have on agency?
It is helpful when facts are ambiguous. It is not dispositive but it carries a lot of weight in determining the intent of the parties.
51
What is indemnification?
when a party agrees to release another party of liability. look at custom and course of dealing to determine if it can be implied or must be in writing.
52
what is the rule for principals duty of indemnification to agent?
an agent, compelled to defend a baseless suit, grounded upon acts performed in principal's business, may recover from the principal the expenses of defense.
53
what are the requirements for principal's indemnification of agent?
1. agent doing principal's business
2. agent actions in scope of authority
3. expensed necessary incurred in doing principal's business
54
What will relieve principal of indemnification to agent?
1 agent negligence
2 agent actions outside of scope of authority
3 occurrence not a direct of natural consequence of act
4 occurrence not foreseeable
55
What are the duties of principal to the agent?
1 indemnification
2 compensation
3 exoneration
due care - good faith - fair dealing
56
What is an ambiguous principal?
It is when there is ambiguity and it is hard to tell who the agent's principal is.
57
When is indemnification implicit?
when it is based on course of dealing or industry standards
58
Is principal liable if agent is negligent or breaks the law?
No, unless the agent is acting on principal's orders and in good faith.
59
What is principal's duty of exoneration?
equitable remedy available to agent which allows agent to demand that principal pay debt or expenses that will ultimately belong to principal.
60
When does a principal have to pay compensation?
When it is required by the contract or
| when reasonable under the circumstances
61
What is a the duty of care owed by master to servant?
master must exercise reasonable care in workplace safety and must warn agent of hazards. this is a non-delegable duty.
62
What is the fellow servant rule?
Rule that protects the principal liable when an agent is hurt or injured as a result of another agent's negligence and the principal has clean hands.
63
What is the vice principal doctrine?
Rule that holds the principal liable when an agent is hurt or injured as a result of a supervisor's negligence.
64
Is the fellow servant rule still applicable?
no, it has been replaced by worker's compensation legislation.
65
What is a master's duty of due care?
The master must be hones and not take advantage of agent.
| Principal can't harm agent's reputation or embarrass agent.
66
What are an agent's 3 non-fiduciary duties.
1. duty of good conduct and to obey
2. duty to indemnify principal for low
3. duty to account
67
What are an agent's 3 fiduciary duties
1. duty of care
2. duty of loyalty
3 duty of full disclosure
68
How do you summarize a fiduciary's duty?
to act primarily for the benefit of the principal, if there is a choice a fiduciary must put principal's interests ahead of theirs and fiduciary must always think of the principal's interest.
69
What is the agent's duty to obey?
agent's duty to obey all reasonable commands by principal as long as they are not illegal, unethical or unreasonable. don't disparage principal
70
When is an agent required to indemnify principal?
when agent is negligent, exceeds authority, commits a fraud or violates the duty of loyalty. indemnification includes damages to principal and third parties.
71
What is the agent's duty to account?
agents duty to keep an account of money or items paid out or received on behalf of the principal.
72
When does the fiduciary relationship begin?
When a relationship of trust and confidence is established. This can be in agency or pre-agency.
73
Are supervisors principles?
No, the company is the principle. supervisors and co-workers can be co-agents. A supervisor's control doesn't create agency.
74
How can master servant create or remove liability in tort?
Using imputed contributory negligence to avoid full liability.
75
What is the difference between master servant and agent principal?
all master are principals and all servants are agents but not all principals are masters and not all agents are servants.
76
What are the exceptions to dual agency?
1 job suggests implied consent/disclosure
2 work in ministerial not adverse
3 principals not adverse even if they seem that way
77
Between employer, employee, and insurance company, who is the agent and principal.
Insurance company principal because it controls the process, employer is the agent because he serves employee at insurance company's direction.
78
What is the difference between a subagent and an agent's agent?
Principal agrees to be principal for a subagent. Principal's agent is the principal for an agent's agent.
79
What is the difference between a subagent and a co-agent?
A subagent has 2 principals, the principal and agent. A co-agent has one principal.
80
How can you tell who the agent's principal is in a real estate transaction?
Follow the money. The principal will pay the commissions establishing on behalf of. Control is also established cause principal will control the listing and access to the listing/property.
81
What is the rule for multi listing services?
showing brokers are subagents of seller. the listing is an offer of sub-agency.
82
What is a middleman?
Some jurisdictions recognize a middleman as someone who is not an agent of either party in a transaction. Generally introduces the parties and is not involved.
83
What are the exceptions to a principal's indemnification of agent?
1 agent acts beyond scope of duties
2 agent's acts are wrongful
3. agent is negligent
84
what can over come the negligence exception and require the principal to indemnify agent?
agent acts at principal's direction and in good faith. applies even if the agent breaks the law.
85
What is the rule for promises (duty of care)?
A promise to do something is a promise to make a reasonable effort to get the end result.
86
What is an agent's duty of full disclosure?
Agent has duty to disclose material facts, he must make a reasonable effort to disclose them and the information must be material.
87
How do you define material?
Information a reasonable person would attach importance to its existence or nonexistence in determining his choices for action in the transaction in question.
88
What factors relieve agent of duty to disclose?
Agent did not know the material fact at the time or the fact is not material.
89
Who had the burden of proof with regards to agent's duty to disclose?
Principal has the burden of proving agent knew the fact and that it was material.
90
Who owes a duty of loyalty to a master/employer?
All the servants/employees.
91
What are an agent's primary violations of duty of loyalty?
1 self-dealing
2 steeling business opportunities
3 intentionally harming principal
92
How does an agent self-deal?
When an agent is on both sides of the transactions and gets double benefits.
93
How does an agent steel business opportunities?
An agent makes deals that should have been made by the principal. Agent must give the principal the opportunity to pass the deal up and allow agent to act.
94
Can agent violate duty of loyalty if the principal still gets what he bargained for?
yes, the agent is not allowed to profit at the principal's expense. He is making the profit the principal should be making.
95
What are the remedies for agent's breach of duty?
1 damages for loss to principal
2 loss of agent's commission
3 loss of agent's secret commission
4 agent can pay commission made by others
96
How does an agent violate the duty of loyalty by competition?
Agent is not allowed to compete with principal without consent. Duty can be extended post employment with a non-compete agreement.
97
What is the rule for confidential information?
an agent can't disclose a principal's confidential information while employed or after he leaves principal's service.
98
What is the analysis to determine if some is independent contractor?
Determine agency
| use factors to determine if independent contractor or employee
99
What are the factors for determining independent contractor?
```
1 extent of control
2 distinct occupation or business
3 industry standards for work
4 special skills
5 instrumentalities
6 length of employment
7 pay by time or job
8 part of employer's regular business
9 believe creating relationship
10 principal in business
```
100
Is the principal liable for a non-servant's actions?
no, principal is only liable for torts or contract violations of servants.
101
What is imputed contributory negligence?
When a master's negligence is applied to a servant or when a servant's negligence is applied to a master for a tort.
102
When is a driver's negligence imputed on passenger?
Only when the driver is a servant. Not imputed if he is an agent or a social guest.
103
What is vicarious liability?
When a master is strictly liable for the actions of servant. Its based on the relationship not on master's actions.
104
If vicarious liability fails, how else can employer be found liable?
For employer's conduct. Negligent hiring, training or supervision.
105
What is the general fiduciary principal?
Agent has a fiduciary duty to act loyally for principal's benefit in matters connected to agency relationship.
106
Can an agent obtain principal's consent to breach duty of loyalty?
only if agent
1. acts in good faith
2. discloses all material facts
3 otherwise deals fairly with principal
107
Can an agent serve more than 1 principal?
Only if the agent
1. fully discloses both principals
2. obtains consent from both principals
108
What are shop rights?
When an employee who is not hired to create something, creates something to use on the job. Employee gets right to the product but company can continue to use the product.
109
What is a covenant not to compete?
A written promise by employee not to work for another company in the same industry.
110
Are all non-competes enforceable?
only when they are limited in time scope and location.
111
is principal vicariously liable for the actions of independent contractors?
no, the independent contractor is not a servant of the principal
112
Is a person serving gratuitously still a servant?
yes, and the principal is liable to the actions of the servant.
113
Is a principal responsible for harm by non-servants?
no unless they are actin gin good faith and at his direction, or the result is intended by the principal.
114
What is the master servant test?
The court looks at right of control over physical conduct of the work to determine if agent is a servant.
115
Exceptions that make principal liable for independent contractor's actions.
1 Inherently dangerous activity
| 2 non-delegable duty
116
What is an inherently dangerous job?
1 dangerous in it's nature
2 creates risk of injury
3 absent special precautions
117
What is a non-delegable duty?
a duty so important to the community it shouldn't be permitted to transfer it to another.
118
What are the non-delegable duties in Texas?
1. employer providing safe workplace
2 store owner maintaining safe conditions
3 common carrier & hospitals
4 performance is a term of the contract
119
What is a general employer?
The employer who lends out a borrowed servant.
120
What is a special employer?
The employer who uses a borrowed servant.
121
Who is liable for a borrowed servant's actions?
The special employer.
122
What are the requirements for vicarious liability?
1. establish master servant relationship
2. servant's act are within scope of employment
master not liable for servant's actions when he's not at work, including commuting.
123
elements for scope of employment
1. kind of work he is employed to perform
2. within authorized time and space limits
3. actuated by intent to serve master
4. if force used, it is not unexpectable by master
124
when does a servant re-enter employment
1. when he is back in authorized space and time limits
2. and is acting with intent to serve master
Cardozo uses dominant purpose to serve master for re-entry, higher standard.
125
Is principal liable for actions of an apparent agent?
No, principal is only liable for actions of an apparent servant. The agent must appear to be a servant.
126
What is the difference between a frolic and detour?
Frolic is a major deviation from scope of employment and relieves principal of liability.
Detour is a minor deviation from scope of employment and does not relieve principal of liability
127
What is a dual purpose in a servant's actions?
When part of the purpose is for the servant's benefit and part of the purpose is for the master's benefit. The master remains liable because the actions are in part to serve master.
128
What is the special errand exception?
A servant is in the scope of employment when running errands or traveling from one place to another for work purposes.
129
When is master liable for servants torts outside scope of employment?
1. master intended conduct or consequences
2. master negligent or reckless
3. non-delegable duty
4. apparent authority or aid by the agency relation
130
Is master liable for servant's intentional torts?
Depends on facts, generally not because of factor 3, servant is usually serving his one interest and not serving the master. Must also be foreseeable to master.
131
What is authority?
the power of the agent to affect legal relations of principal by acts done with the principal's manifestations of consent to him.
132
What is actual authority?
When an agent acts with third party based on
1. principal's manifestations
2. agent believes agent wishes the agent to act. Principal becomes party to contract, agent is not party to the contract.
133
Elements for scope of authority
1. agent acting based on principal's manifestations (written, spoken or conduct)
2. reasonable interpretations of the manifestations
3. interpretations are reasonable if a reasonable person would interpret them the same.
134
What is a power of attorney?
a legal documents that grants an agent the power to act on behalf of the principal.
135
What is implied authority?
authority is proven circumstantially, based on principal's conduct.
136
What is incidental authority?
when a principal grants agent the authority to perform task A but agent must perform task B in order to perform task A, then agent has implied authority to perform task B.
137
What is the difference between actual authority and apparent authority?
For actual authority agent believes he is given authority.
for apparent authority third party believes agent has been given the authority.
both basd on principal's manifestation.
138
What is express authority?
actual authority where principal explicitly tells agent what acts to perform.
139
What is delegated authority?
when it is reasonable for agent to assume principal will allow agent to delegate the authority to another. based on principal's actions, look at agent's perceptions not principal's perceptions.
140
What is apparent authority?
1. when principal makes manifestation to third party
2. third party reasonably believes principal wants agent to act on principal's behalf.
it binds principal even if agent's conduct is not authorized.
141
What is power of positions?
when third party reasonably believes an agent has authority simply based on his position or title.
142
Elements of authority by estoppel.
1. person detrimentally relies
2. belief that agent acted for principal
3. principal caused the belief - principal didn't take reasonable steps to prevent it belief.
no manifestation is required.
143
what is the telephone rule
when principal places ad with phone number it is reasonable for third party to assume person who answers phone has the authority to act on behalf of principal.
144
Factors for inherent agency?
1. general agent of principal
2. agent performs task x for principal
3. task X accompanies task Y
4. task X was not authorized
5. third party believes agent is authorized to perform task Y
145
Factors for ratification?
1. affirm after the fact
2. unauthorized acts of agent
3. purportedly done on principal's behalf
146
What is ratification?
when principal affirms an agents act after the fact and is held liable for the agents actions as a result. No consideration is required and it can be affirmed to another party.
147
What is knowledge?
subjective knowledge of a fact
148
when does a person have notice?
when they are told or have reason to believe a fact or have notification.
149
Does an agent have notice when it is given to principal?
No an agent is not presumed to receive notice when a principal receives notice but a principal is presumed to receive notice when an agent receives notice.
If the agent has no authority over the matter notice is not imputed on principal.
150
Who are parties to a contract made by agent for an undisclosed principal or a partially disclosed principal?
The agent, third party and undisclosed or partially disclosed principal.
151
Who are the parties to a contract made by agent for a fully disclosed principal?
the principal and third party - the agent is not a party
152
What happens when an undisclosed principal steps into agent's shoes and enforces the contract with the third party?
third party must deal with the undisclosed principal. If he pays agent after notice he is still liable to undisclosed principal and must pay him too.
153
What is the exception that requires the agent to perform instead of undisclosed principal?
contracts for specific land or goods, contracts for personal services
154
What happens if a third party inquires about an undisclosed principal?
Agent must disclose or there is fraud in the inducement and the third party is not bound to the contract.
155
What is a disclosed principal?
when the third party knows agent is acting for a principal
156
what is an undisclosed principal?
when a third party does not know an agent is acting or a principal.
157
what is a partially undisclosed principal or unidentified principal?
when a third party is told there is a principal but is not told who the principal is.
158
What is the election rule?
used in Texas, third party can sue undisclosed or partially disclosed principals and agents but can only get a judgment against one.
159
What is the satisfaction rule?
third party can sue undisclosed or partially disclosed principals and agents until they get satisfaction.
160
Can a third party enforce a contract against an undisclosed or partially disclosed principal?
yes, unless undisclosed or partially disclosed principal has already paid the agent and the agent failed to pay third party. Third party must enforce on agent.
161
What is fraud in the inducement?
when an agent makes materially false statements to the third party that induces the contract.
undisclosed principal must know agent would not enter into contract with him.
162
Is there apparent authority with an undisclosed principal?
no because third party doesn't know about him, can't believe agent is acting on his behalf.
163
What is unintentional undisclosed Principal?
when agent mistakenly forgets to disclose the principal and accidentally creates an undisclosed principal.
164
What is the implied warranty of authority?
when an agent signs on behalf of an entity there is an implied warranty from the company because the agent has the authority to enter into the contract on behalf of the company.
165
How is an agency relationship terminated?
1. at will by a manifestation of termination, they just walk away. If there is a term the terminating party may still be liable for contractual obligations but is free to walk away.
2. death of agent or principal
3. incapacity of principal
4 bankruptcy of principal
166
What is the effect of termination of agency?
1. actual authority and inherent agency terminate immediately.
2. apparent authority terminates when third party believes agent no longer has authority
