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Flashcards in Agency Deck (10)
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What are the elements of Apparent Authority?

Principal provides agent with the 1) indicia of authority to make a decision that would bind the company and 2) the other party reasonable relies on those indicia and the agent's actions.


When Will a Principal Be Liable for the Intentional Torts of its Agents?

Intentional torts are outside the scope of the agency relationship unless it is 1) authorized by the principal, 2) a natural result of the nature of agency relationship, and 3) the agent is motivated by a desire to serve the principal.


What is required to form an Agency Relationship?

Assent: there is an agreement between the parties.
Benefit: the agent's conduct for benefit of the principal.
Control: principal has right to control and supervise performance.

Sub-agents typically are not agents of the principal because the principal lacks assent and control; borrowed agents typically are not agents of the principal because of lack of control.


What Conduct is Considered Within the Scope of An Agency Relationship?

1) The conduct was of the kind agent was hired to perform;
2) the tort occurred "on the job" (Better Formulation?); and
3) the agent's act benefitted the principal.


What is a Frolic?

A new and independent journey of an agent not within the scope of the agency relationship.


What is a Detour?

A "mere departure" during the scope of an agent's work; considered to be within the scope of the agency relationship.


What is Implied Authority?

1) Authority to do certain actions where such authority is necessary for the agent to achieve the primary task;

also occurs where 2) the authority would be given to people who customarily perform similar functions;

or 3) the principal has given the agent prior acquiescence regarding the conduct.


What is Ratification?

Authority that is granted to the agent after the principal has knowledge of material facts of the action and has accepted the benefits of the agent's action.


What is an Agent's Duty of Care?

Duty to perform task which agent is assigned with ordinary care associated with the task or profession.


What is an Agent's Duty of Loyalty

Agent cannot engage in self-dealing, usurp the principal's authority, or earn secret profits.

Principal may recover losses caused by breach and disgorgement of funds achieved in violation of the duty of loyalty.