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Flashcards in agency Deck (17)
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the legal relationship whereby one person (the principal) manifests assent that another person (the agent) shall act on her behalf and under her control and the agent consent to so act


what duties does the agent owe the principal?

--duty of care
--duty of loyalty
-- duty of obedience


sub agents

-- person appointed by an agent to perform functions that the agent has consented to perform on behalf of the agent's principal

--an agent has absolute liability tot eh principal for breaches by a subagent
--subagent owes the P same duties as the agent


what duties does the principal owe the agent?

--duty of reasonable compensation and reimbursement for expenses
--duty to cooperate with the agent and not unreasonably interfere with the agent


actual authority

authority that the agent reasonable believes she possesses based on the principle's dealings with her
--may be express or implied
--express = authority that which is actually contained within the 4 corners of a contract or agreement
--implied = authority which the agent reasonably believes she has as a result f the principal's actions

DEATH WILL TERMINATE ACTUAL AUTHORITY (unless specified in durable power attorney terms to survive death)


apparent authority

arises from the reasonable belief of third parties interacting with the agent that do not know that they do not have the authority to act
--when the P directly or indirectly holds out another as possessing certain authority even though they do not



inherent authority

derived solely from the agency relationship and results in the P big bound even though the agent had no actual or apparent authority to perform
--courts want to protect innocent third parties


what if the agent gets rid of the P's goods

--P will be held liable for the disposition of her goods by an agent possessing them if the agent was given some indicia of ownership or if the goods disposed of were sold by an agent who is a dealer in the particular goods


ratification creating an agency relationship

--an agency relationship is created by ratification when an agent purports to act on behalf of a principal without any authority at all, but the principal subsequently validates the act and become bound

--pre-reqs for ratification:
1) P must know or have reason to know all material facts
2) accept the ENTIRE transaction
3) have capacity

--may be express or implied


what is an agent's liability to third party contracts?

1) disclosed P (existence AND identity known) = P is always liable on the contract and the agent is general not liable unless the parties to the contract intended for the agent to be held liable

2) undisclosed and unidentified P = liability for BOTH the P and the agent (but third party can only recover from one of them)


tort liability in agency

--a principal may be vicariously liable for the torts of her agent under respondent superior and apparent authority
--joint and several liability attaches in vicarious liability cases

--a principal will be held individually liable for her own negligence in hiring, retaining, or supervising the agent


factors to consider for respondent superior

--employer-employee relationship

--conduct must have occurred in THE SCOPE OF THE EMPLOYMENT


what factors do you consider when determining the right to control?

--the characterization of the parties
--the degree of skill required on the job
--whose tools or facilities are used
--what the period of employment is
--the custom of supervision of work
--what the basis of compensation is


employer-employee estoppel

where the P creates the appearance of an employer-employee relationship upon which a third party relies --> the P will be estopped from denying the relationship and will be liable under the doctrine of respondent superior


liability for acts of independent contractors

a principal will incur liability for the acts of an independent contractor if:
1) where there was an inherently dangerous activity involved
2) nondelegable duties
3) the principal knowingly selected an incompetent independent contractor


scope of employment

-- to be within the scope of employment, the employee's conduct need not be actually authorized

frolic = major detour or deviation requiring a substantial departure from employment beyond the scope

detour = small deviation from the employer's direction is within the scope of employment


can principles be liable for intentional torts?

no, not usually
--intentional torts are not typically within the scope of employment unless a natural incident of the employee's duties, where the employee is promoting the P's business, or where the nature of the work gives rise to hostilities