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Flashcards in Agency Deck (12):

Existence of agency relationship

(1) principal and agent assent to the relationship; (2) A acts on P's behalf; (3) A's actions are subject to P's control


Express actual authority

oral or written words; clear, direct and definite language; or specific, detailed terms and instructions

P's manifestation must cause A to believe that A is doing what P wants (subjective) and A's belief must be reasonable (objective); P must give clear notice if P disagrees with A's actions


Implied actual authority

allows A to take whatever actions are properly necessary to achieve P's objectives, based on A's reasonable understanding of the manifestations and objectives of P

Implied by business customs/trade usage in a industry; by the position of the agent; by acquiescence (P's acceptance of A's acts or failure to object)


Apparent authority

P causes third party to believe agent has authority to act;

Reasonable belief based on past dealings; trade customs, relevant industry standards, P's written statements of authority, A's position



a third party is justifiably induced to make a detrimental change in position because that third party believed the transaction was entered into for the principal and either the principal: (1) intentionally/carelessly caused the belief; or (2) failed to take reasonable steps and use ordinary care to notify them of the facts



P must ratify the entire act/transaction; P must have legal capacity; ratification must be timely; P must have knowledge of the material facts involved in the original act


Respondeat superior

P is vicariously liable to a third party harmed by A who is an employee and who committed an act within the scope of employment


Scope of employment

When performing work assigned by employer/engaging in a course of conduct subject to employer's control


Frolic and detour

Frolic: the employee's personal errand involving a significant deviation from performing work out S/E

Detour: travel for a personal errand may be within S/E if it is merely a detour (de minimus departure from assigned route)


P's direct liability for torts

P authorizes the conduct or intended its consequences or affirms a prior act that was done on P's behalf; negligence in selecting, supervising or controlling A


Duties of agent to principal

duty of care; duty to provide information; duty of loyalty; duty of obedience; duty to not usurp business opportunity, take financial gain from principal, provide accounting; not to commingle P's property with a third party


Scope of employment (intentional torts)

when force is inherent in the employee's work; employer authorizes employee to act on his behalf