Overview Flashcards
What is agency?
A consensual relationship b/t a principal and an agent
What most the P and agent have in order to form an agency relationship?
- Capacity
A. P needs contractual capacity
B. Agent only needs minimal capacity - Consent
What are the two methods of formation of an agency relationship?
- By action
2. By operation of law
What are the three ways of forming an agency relationship thru action?
- ACTUAL AUTHORITY – the P and A actually agree to the relationship
- APPARENT AUTHORITY – the P can hold another out as his agent
- RATIFICATION – the P can agree to be bound by previous unauthorized acts
What are the agent’s duties?
- Duty of loyalty – agent must disclose interests adverse to the P
- Duty of obedience – to follow all lawful instructions of the P
- Duty of care – agent must act with R care
- Duties under contract – A must comply with any duties under the contract
What are the P’s duties?
- Duty to compensate and reimburse
- Duty to cooperate
- Duties under contract
What are an agent’s remedies?
- Agent can sue for breach of contract
2. An agent has a possessory lien on any money the P owes her
What are the P’s remedies?
- A compensated agent can be held liable for damages based on breach of k
- Any agent is subject to tort liability for misuse of the P’s property, for intentional or negligent misperformance, or for the failure to perform
- If an agent breaches her fiduciary duty and secretly profits, the P may recover the profits
- P can bring an accounting action in equity to determine how much agent owes P
- If the agent has committed an intentional tort, or intentionally breached her fiduciary duty, the P may withhold the P’s commission, in addition to other remedies,
- P may terminate the agency relationship when agent breaches a duty
What is actual authority?
the authority an agent thinks she has based on her dealings iwth the P
what are the two types of actual authority?
- actual express authority – the authority that a P expressly gives an A
- actual implied authority – the authority that an A reaosnably belives she has as a result of her actions with the P. For example, if hired to manage an apartment building, she may think that she has the implied authority to hire a janitor.
What is apparent authority/when will the P be bound even if the A lacked actual authority?
- the P held out the A as having authority
2. based on the holding out, the 3d party R believed that the agent had authority to act
What are the methods of ratification?
- Acceptance of the transaction’s benefits
- Silence if there is a duty to affirm
- Suing on the transaction
Contract liability to 3d parties: 3d party v. P?
the general rule is that if the agent had authority, the P is liable to the 3d party
Contract liability to 3d parties: 3d party v. agent?
Whether an agent can be held liable depends on whether the P was disclosed, unidentified, or undisclosed
- disclosed P - agent generally
- unidentified or undisclosed P - either agent or P can be held liable, 3d P chooses
