Flashcards in Agency Deck (33):
When is a principal liable for the torts of an agent?
When there is a principal agent relationship and tort committed within the scope of the relationship
Is consideration and a writing required to enter into an agency relationship?
can be informal
What does an agency relationship require?
1) assent between parties
2) agent is acting for the principal's benefit
3) principal has a right to control the agent
Is a principal liable for torts committed by sub-agent?
Only if there is assent, benefit and right to control.
- Generally no right to control
Is a principal liable for tort committed by an agent who is borrowed from another principal?
Only if there is assent, benefit and control
When is a principal liable for the torts of an independent contractor?
1) activity is ultra hazardous
2) activity is non-delegable
3) principal holds out with appearance of agency
4) principal's own negligence in hiring or selecting
Is a frolic within the scope of the agency relationship?
No - frolic is a major deviation and outside of scope.
Is a detour within the scope of the agency relationship?
Yes, mere departure from assigned task, within scope of agency
When is a principal liable for the intentional torts of an agent?
1) intentional tort is authorized by principal
2) natural to the nature of employment
3) motivated by a desire to serve a principal
When is a principal liable on a contract entered into by agent?
Only on contracts that principal authorized agent to enter into.
- actual implied
How can express authorization be revoked?
1) unilateral act of principal or agent
2) death or incapacity of principal, unless irrevocable or durable power of attorney
Actual implied authority can arise when?
1) necessity - implied authority to do all tasks
2) customarily performed by persons who agent's title or position
3) prior acquiescence by principal
What is required for apparent authority?
Principal cloaked agent with appearance of authority and third party reasonably relies on the appearance of authority
How can a principal ratify the actions of an agent?
Principal has knowledge of all material facts regarding the contract and principal accepts the benefits.
Can a principal alter the terms of the contract when ratifying the agent's actions?
No. Must agree to all the terms.
Can an undisclosed principal ratify a contract entered into by agent?
No. Third party never relied upon the undisclosed principal's existence
Can silence by a principal ratify a contract entered into by an agent?
Yes, when he would otherwise have a duty to disaffirm the transaction.
Who is liable on a contract entered into by an agent with a third party when the principal is partially disclosed or undisclosed?
Third party has election to bind principal or agent.
What are exceptions to when an agent will be liable on a contract with a third party for a disclosed principal?
1) agent is a party to contract and parties intended agent to be a party
2) agent's implied warranty of authority
Can a minor serve as an agent?
Yes, agent only need to have minimum capacity.
Can an employee be a bailee of employer's goods?
No when used in course of employment.
When goods are used for employee's own benefit then a bailment may result (possession and control)
Is a principal liable for the negligence of employee who uses goods outside scope of employment?
No. May be a bailment situation and bailor is not liable for negligence of bailee.
Is commuting to and from work within the scope of employment to hold an agent liable for negligence?
No. This is not within the scope of agency, unless facts indicate otherwise.
While driving on a delivery, an agent gets into a dispute with a third party regarding the right of way on a road. During the dispute, the agent hits the third party. Is the principal liable?
Ordinarily principal not liable for intentional torts
may be liable if done within the scope of the employment and motivated by an interest to serve the principal
- if facts indicate it was a personal feeling of agent then outside of scope of employment
Does an agent's conduct while on a lunch break fall within the scope of employment?
No. Lunch break falls outside of scope of employment and does not reenter employment until directed by principal.
When an agent breaches a fiduciary duty, can a principal withhold compensation from an agent?
What is the general rule regarding knowledge of agent?
Imputed to principal
a) agent's behavior raises a presumption that knowledge will not report
b) agent is acting out of a personal motive
Is an agent acting outside his authority when committing fraud?
No. Probably still within scope of agency
If the agent lacked authority to enter into a contract, who can the third party hold liable?
Depends on whether the principal's identity was disclosed.
If disclosed then no liable for the agent, only principal.
If an agent disobeys orders from the principal are they liable on the contract?
Agent liable for disobeying orders.
How can an agent be liable to a third party on a contract when there is no actual, apparent, or ratification authority to enter into the contract?
Based on a warranty theory.
Every agent impliedly warrants to the third party that he has authority to enter into the contract.
How can an agent be liable to a principal on a contract when there is no actual, apparent, or ratification authority to enter into the contract?
For exceeding authority and breaching his duty to follow principal's instructions.