Power to bind principal Flashcards
When do an agent’s actions bind the principal?
(1) Agent has actual authority
(2) Agent has apparent authority
(3) The inherent agency power doctrine applies
(4) Principal ratifies the agent’s actions
When does an agent have actual authority?
When the principal communicates to the agent in a manner that leads the agent to reasonably believe he has authority
What is implied actual authority?
The agent’s authority to do what is reasonably necessary, usual, and proper for accomplishing the task the principal has requested to be done
Under what circumstances can an agent delegate its authority?
(1) Express authorization
(2) Acts are purely mechanical
(3) Acts are something the agent cannot perform, but the subagent can
(4) Acts are commonly delegated in the industry or business
When does an agent’s actual authority end?
(1) Termination of relationship
(2) Principal revokes authority
(3) Principal changes the actual authority
When does an agent have apparent authority?
(1) Principal holds out or represents to a third party that the agent has authority
(2) Third party reasonably believes the authority exists
When does apparent authority terminate?
When the third party receives notice of circumstances that make it unreasonable for the third party to continue to believe the agent has authority
What is the inherent agency power?
When the agent possessed neither actual or apparent authority, the court will balance the interests of all parties to determine whether to find the principal liable (courts tend to protect innocent third parties)
What are the requirements for ratification?
(1) Act was one that the principal could have legally performed
(2) Act was performed for the principal’s benefit
(3) Principal existed at the time the act was performed
(4) At the time of ratification, principal was not incapacitated
(5) Ratification must encompass the entire act
How may a principal ratify?
(1) Express approval
(2) Conduct is consistent with ratification
When is a principal vicariously liable for an agent’s actions?
(1) Agent relationship is an employer-employee relationship
(2) Tort was committed within the scope of employment
When is a principal vicariously liable for the actions of an independent contractor?
Only when the principal hired the independent contractor to perform an inherently dangerous activity
What factors do courts use to distinguish employees from independent contractors?
(1) Skill level or specialized training
(2) Whether agent has multiple clients or independent business
(3) Specialized tools provided by agent
(4) Paid by job or salary/hourly rate
(5) Whether the principal has the right to control the details of the work
When is an employer liable for an employee’s intentional tort?
If the conduct:
(1) is of the kind the employee was employed to perform
(2) occurred within the time and space limits of the employment
(3) was motivated by a desire to serve the employer
What acts are outside the scope of employment?
(1) Frolics
(2) Travels to and from work (unless the employee’s vehicle was provided by the employer for ease of access)
