Agency - Liability of Principal to 3P for Torts of an Agent

Question 1

Two-Part Test for Determining if Principal will be liable for torts committed by its agent

Answer 1

(1) There is a principal - Agent Relationship;

(2) Tort was committed by the Agent within the scope of that relationship.

Question 2

When is a principal-agent relationship formed? [Three elements]

Answer 2

(1) Assent - an informal agreement between the P, who has capacity and the agent.
(2) Benefit - Agent’s conduct must be for the P’s benefit.
(3) Control - P must have the right to control the agent by having the power to supervise the manner of the agent’s performance.

Question 3

What is required for a principal to vicariously liable for a sub-agent or borrowed agent?

Answer 3

Need (1) Assent, (2) Benefit, (3) Control

Usually no Right to Control, thus not vicariously liable.

Question 4

What is the general rule for principal’s liability of an independent contract?

Answer 4

Generally there is no right to control b/c there is no power to supervise the manner of its performance. Thus, no vicarious liability.

Question 5

Two Exceptions to General Rule of No Vicarious Liability for Ind. Contractors.

Answer 5

(1) Inherently dangerous activities - If i-contractor commits a tort while engaged in an inherently dangerous activity then there will be liability.
(2) Estoppel - If you hold out the independent contractor with the appearance of agency, you will be estopped from denying vicarious liability.

Question 6

What is the three-part test for determining the scope of principal-agent relationship?

Answer 6

(1) Was the conduct “of the kind” agent was hired to perform?
* Conduct within the job description is likely inside the scope.
(2) Did the tort occur on the job? [Frolic vs. Detour]
* Frolic - outside the scope
* Detour - within the scope
(3) Did the agent intend to benefit the principal? If the agent ever intended in part to benefit the P then that’s enough to be inside the scope.

Question 7

What is the different between Frolic v. Detour?

Answer 7

Frolic - New and Independent journey - outside the scope.

Detour - Mere departure from an assigned task.

Question 8

What is the general rule and three exceptions for principal liability for intentional torts committed by an agent?

Answer 8

General Rule: Intentional torts are generally outside the scope of the agency.

Exceptions: W/in the scope of agency unless

(1) Authorized by principal
(2) Natural from the nature of employment
(3) Motivated by a desire to serve the principal.