Agency Flashcards
(29 cards)
First question when you are faced with an agency question.
Is it liability in contract or tort?
Who must have contractual capacity? (principal, agent?)
The principal must have contractual capacity, but the agent need NOT b/c just an intermediary.
Is consideration required for an agency relationship? Is a writing required?
No. No consideration needed. No writing needed unless to satisfy the Statute of Frauds
How can actual authority be created?
Expressly or impliedly
What is express authority?
When the principal tells agent to do something.
What is implied actual authority
When principal’s conduct leads agent to believe agent has authority (agent bought stuff and principal paid for it)
How can actual authority terminate?
- certain period of time or reasonable time
- by change of circumstances
- if agent acquires adverse interest
- when agent says so
- when principal says so (unless the power is coupled with an interest - then irrevocable)
- by death/incapacity/bankruptcy
Example of coupled with an interest?
Collateral for a loan
Just giving someone a commission is not “coupled with an interest.”
Can an agent delegate?
Yes if P consents (express or implied)
What if there is no actual authority? Look for ______
apparent authority
What is apparent authority?
Actions by principal cause the third party to mistakenly believe the agent has authority
Can apparent authority continue even after actual authority is gone?
Yes. Make sure to look at it from third party’s perspective - you must tell 3rd parties directly that the agent no longer has authority
What actions result in the principal ratifying?
Accepting the benefits
Suing on the contract
Expressly affirming the contract
What must principal do to ratify?
- have knowledge of all material facts
- must completely ratify (no half and half)
- principal must have had capacity to ratify at the time the contract was originally made
When won’t principal be allowed to ratify?
Principal can’t ratify if there has been a bona fide purchaser in the meantime.
Example: A offers to sell car to Bob for $100. P, not knowing of the other offer, offers to sell car to Kelly for $50. P later wants to ratify A’s offer b/c it’s more money. NO
What is the difference between adoption and ratification
Adoption = NOT retroactive. Liable from that point on Ratification = retroactive. Liable from date of contract
Does adoption of a contract relieve the original contractor?
No - both are liable (think promoter and corporation)
What duties does an agent owe to principal?
- duty of loyalty
- duty of care
- duty of obedience
What duties does the principal owe the agent?
Duty to compensate, reimburse, and indemnify the agent.
What happens if agent violates duty? Possible remedy if agent takes principal’s property for his own?
Could impose a constructive trust in care of the principal
When is a third party not liable to the principal?
When there’s an undisclosed principal and an agent has special skills.
Ex: Third party hires Rachel Ray, who the third party doesn’t know is actually an agent for a not good cook. Will third party have to pay third party? NO
Liability in tort: respondeat superior 2 step analysis
- employee? (or independent contractor)
2. tort committed w/in scope of employment?
Independent contractor vs employee factors
CONTROL
who supplied the equipment, tools? was the job long term? was it a salary or lump sum? how much skill was required?
When will the principal not be liable for a tort?
When employee is on a frolic
