Flashcards in R8- Agency Law Deck (21)
What is Agency Law?
Agency Law deals with someone's ability to bind you to a contract with a third party
What is required for Agency to exist?
- Both parties must consent to the relationship and intend for an Agency relationship to exist
- Agent owes Principal fiduciary duty
- Principal doesn't owe Agent fiduciary duty
- A contract is NOT required & an Agency agreement is not based on Contract Law
What is Actual Authority in an agency?
- Reasonably Believes, has Power & Right to bind Principal
- Is Expressly granted
- Is Implied by the duties you expect the Agent to perform & is necessary to carry them out
What is Implied Authority in an agency?
- When authority is expressly granted; it is implied that the agent has the authority to carry out the duties
- Does not include authority to sell or alter a business
What is Apparent (Ostensible) Authority in an agency?
Based on the 3rd party's perspective
- They believe that the Agent has the authority to enter into a contract based on:
- -Prior dealings with agent
--Agent's title leads the third party to believe they can enter into a contract
--The Principal hires the Agent to carry out duties that normally carry with them the rights to enter into contracts
How is an Agency terminated?
- Either party has Power to terminate but not always have Right.
- Both Agent and Principal agree to terminate
- Principal fires Agent
- Agent breaches their contract (violating their obligation to act as a fiduciary to Principal)
How do you terminate Apparent Authority?
- Actual Notice: Old Customers
- Constructive Notice: New Customers
- No Notice Req.: Death, incapacity of Principal, Principal receives discharge in bankruptcy
--All Authority Ends
What is an Agency Coupled with an Interest?
- Agent acquires an ownership interest in the Agency
- Can only be terminated early (before the interest expiration date) by the Agent
- Unless the Agency has a specific time limit spelled out in a contract; the Agent's authority is irrevocable
by the Principal
When is an employee an Agent; and when does this make the employer liable?
Employees are agents while acting within the scope of their duties.
- For employees who injure 3rd parties while acting within the scope of their duties; both Employee and Employer are liable
When are Agents liable for torts (civil wrongs) they commit?
Agents are liable for torts (civil wrongs) committed whether they had authority or not
Are Agents who act outside of their authority liable?
- Agents who act outside of their authority will be liable for the act
- Exception - Principal ratifies the contract which relieves Agent of liability
What is an Agent's liability when acting for an Undisclosed principle?
- Agent liable to 3rd party even if acting within authority
- 3rd party can sue both Principal and Agent if Principal becomes disclosed
- Agent can then sue Principal
What are the requirements for a Power of Attorney (POA)?
- Must be in writing
- Must be signed by person granting the POA
- Ends upon death of Principal
When is a Writing Required to a create a Agency Relationship?
- If duties cannot be performed within a year
- To buy or sell Land
Agency Power can arise through?**
- Power & Right:
--Grant of Actual Authority
- Power but No Right:
---Apparent authority or Estoppel
Actual Authority is Terminated by any what events?***
- Death of either Principal or Agent
- Incapacity of Principal
- Discharge in Bankruptcy
- Failure to acquire necessary license
- Destruction of Subject Matter
- Subsequent illegality
Principal's Secret Limitations on Agent's Actual authority but not effective to?
- Limit the Agent's Apparent Authority
- Unless 3rd Party given notice of Limit
What is an Agent's liability when acting for an Disclosed principle?
- Agent NOT Liable if Authorized
Who are liable for Torts?
- Employer is liable for Employees
-- Injury must have occurred while Employee was working for Employer with time & geographic area
For a Principal to Ratify:
- Principal must know all of the facts
- Must ratify before third party cancels agreement
- If Principal keeps the benefits of the contract; ratification is implied
- Contract must be 100% ratified or there is no contract