Restatement of the Law, Agency 3rd Sec. 7 Flashcards
Agent’s Liability to Third Party
§ 7.01 Agent’s Liability to Third Party
An agent is subject to liability to a third party harmed by the agent’s tortious conduct. Unless an applicable statute provides otherwise, an actor remains subject to liability although the actor acts as an agent or an employee, with actual or apparent authority, or within the scope of employment.
Duty to Principal; Duty to Third Party
§ 7.02 Duty to Principal; Duty to Third Party
An agent’s breach of a duty owed to the principal is not an independent basis for the agent’s tort liability to a third party. An agent is subject to tort liability to a third party harmed by the agent’s conduct only when the agent’s conduct breaches a duty that the agent owes to the third party.
Principal’s Liability—In General
§ 7.03 Principal’s Liability—In General
(1) A principal is subject to direct liability to a third party harmed by an agent’s conduct when
(a) as stated in § 7.04, the agent acts with actual authority or the principal ratifies the agent’s conduct and
(i) the agent’s conduct is tortious, or
(ii) the agent’s conduct, if that of the principal, would subject the principal to tort liability; or
(b) as stated in § 7.05, the principal is negligent in selecting, supervising, or otherwise controlling the agent; or
(c) as stated in § 7.06, the principal delegates performance of a duty to use care to protect other persons or their property to an agent who fails to perform the duty.
(2) A principal is subject to vicarious liability to a third party harmed by an agent’s conduct when
(a) as stated in § 7.07, the agent is an employee who commits a tort while acting within the scope of employment; or
(b) as stated in § 7.08, the agent commits a tort when acting with apparent authority in dealing with a third party on or purportedly on behalf of the principal.
Agent Acts with Actual Authority
§ 7.04 Agent Acts with Actual Authority
A principal is subject to liability to a third party harmed by an agent’s conduct when the agent’s conduct is within the scope of the agent’s actual authority or ratified by the principal; and
(1) the agent’s conduct is tortious, or
(2) the agent’s conduct, if that of the principal, would subject the principal to tort liability.
Principal’s Negligence in Conducting Activity Through Agent; Principal’s Special Relationship with Another Person
§ 7.05 Principal’s Negligence in Conducting Activity Through Agent; Principal’s Special Relationship with Another Person
(1) A principal who conducts an activity through an agent is subject to liability for harm to a third party caused by the agent’s conduct if the harm was caused by the principal’s negligence in selecting, training, retaining, supervising, or otherwise controlling the agent.
(2) When a principal has a special relationship with another person, the principal owes that person a duty of reasonable care with regard to risks arising out of the relationship, including the risk that agents of the principal will harm the person with whom the principal has such a special relationship.
Failure in Performance of Principal’s Duty of Protection
§ 7.06 Failure in Performance of Principal’s Duty of Protection
A principal required by contract or otherwise by law to protect another cannot avoid liability by delegating performance of the duty, whether or not the delegate is an agent.
Employee Acting Within Scope of Employment
§ 7.07 Employee Acting Within Scope of Employment
(1) An employer is subject to vicarious liability for a tort committed by its employee acting within the scope of employment.
(2) An employee acts within the scope of employment when performing work assigned by the employer or engaging in a course of conduct subject to the employer’s control. An employee’s act is not within the scope of employment when it occurs within an independent course of conduct not intended by the employee to serve any purpose of the employer.
(3) For purposes of this section,
(a) an employee is an agent whose principal controls or has the right to control the manner and means of the agent’s performance of work, and
(b) the fact that work is performed gratuitously does not relieve a principal of liability.
Agent Acts with Apparent Authority
§ 7.08 Agent Acts with Apparent Authority
A principal is subject to vicarious liability for a tort committed by an agent in dealing or communicating with a third party on or purportedly on behalf of the principal when actions taken by the agent with apparent authority constitute the tort or enable the agent to conceal its commission.
