Agency Flashcards
(37 cards)
What is a big indicator to look for in determining if someone is an employee or an independent contractor to an employer?
The degree of control that a employer can exert. The more control the more likely it is an employee
If an employee creates intellectual property while on the job who does it belong to?
the employer
What does an employer have to worry about with an employee but not an independent contractor?
1- fed and state income tax withholding
2- social security taxes
3- fringe benefit inclusion
4- workers compensation insurance
5- unemployment compensation insurance
6- Respondeat superior liability
7- workplace safety rules
8- anti-discrimination laws
Generally a independent contractor can’t cause vicarious liability because of the doctrine of “Respondeat Superior”, however, if ____________ then the employer too will be potentially liable.
the work is ultra-hazardous
ex. someone hired to destroy the employers building
How is agency authority created?
1- Appointment
2- Apparent authority / Estoppel (before the fact)
3- Emergency / Necessity (during the fact) (spouse admitting the other to the hospital)
4- Ratification (after the fact)
What are the two ways that appointment can take place? Define them.
- Express appointment: express agreement in words between principle and agent
- Implied appointment: words and/or conduct by the principle that reasonably implies IN THE MIND OF THE AGENT that there is an agency relationship
Define apparent Authority / Estoppel in the creation of agency authority.
Words and / or conduct by the principle that reasonably imply IN THE MIND OF A THIRD PARTY that there is an agency relationship
An agent with authority does not necessarily have all authority to act. What word represents the extent of authority?
scope
From least scope to most scope list the types of authority that can be granted…
Smallest: Express
- Implied
- Apparent
Biggest: Ratification of unauthorized acts
If an agent has the power to bind a principal he still may be liable. Why is this?
He may not have the “right” to bind
For the different types of authority below, for which does the agent have the right to bind? For which the power?
- Express
- Implied
- Apparent
- Ratification of unauthorized acts
- Express: both
- Implied: both
- Apparent: power only
- Ratification of unauthorized acts: both
What relationships do power and right focus on?
Power: Principal and 3rd party
Right: Principal and agent
Under which type of authority is the agent at risk of liability?
- apparent authority / estoppel
and
- ratification
What are the three levels of disclosure of a principal? Define.
1- Disclosed Principal : 3rd party knows agent is an agent and the principal the agent is working for
2- Partially disclosed Principal: 3rd party knows person is agent, but doesn’t know who for
3- Undisclosed Principal: 3rd party doesn’t know person is an agent
Concerning the liability of a principal to a 3rd party when is there liability with a simple contract?
How does the agents disclosure come into play?
If the agent had power to bind then there is liability
the level of disclosure is irrelevant
Concerning the liability of a principal to a 3rd party when is there liability with a negotiable instrument?
How does the agents disclosure come into play?
If there is power to bind then the principal may be liable if the agent disclosed the principal.
If the agent partially disclosed the principal then the principal is liable if the original parties are still involved.
Undisclosed –> no liablity
Concerning the liability of a agent to a 3rd party when is there liability with a contractual liability?
How does the agents disclosure come into play?
If there is less than full disclosure of the principal then the agent has contractual liability
Concerning the liability of a agent to a 3rd party when is there liability with a warranty liability?
How does the agents disclosure come into play?
When the agent didn’t have power to bind then the agent has breached his warranty of authority and is liable,
unless the reason the agent didn’t have power was due to an event unknown to him
How can an agent avoid liability to its principal?
1- have the right (not just power, and must be in scope)
AND
2- observe all of the duties owed to the principal
What are the agent’s duties to the principal?
1- Loyalty
2- Conefidentiality
3- obedience and performance
4- Reasonable Care
5- Accounting
6- Notification
What does loyalty mean in the context of an agent’s duties?
the agent is a fiduciary who has to put his own personal interest behind those of the principal.
This means they can only represent one principal unless their is consent from multiple
What does confidentiality mean in the context of an agent’s duties?
agent keeps all confidential and/or sensitive info during and after the agency relationship
What does obedience and performance mean in the context of an agent’s duties?
duty to obey all lawful instructions
What does reasonable care mean in the context of an agent’s duties?
The agent must abide by the reasonable person standard or even a higher standard if the agent is an expert
