Agency

Front 1

Creation of an agency relationship

Back 1

1) P muts have contractual capacity
2) Consent of both parties
3) writing IF REQUIRED (equal dignities doctrine)

Front 2

Method of Creation of Agency Relationship

Back 2

1) By act of the Parties - a) agreement b/t P and A; b) holding out by P; or ratification
2) By operation of law - a) estoppel; or b) statute

Front 3

Actual Express Authority

Back 3

Authority which is actually contained within the four corners of the agency agreement. It is effective even if it was granted mistakenly or because of misrepresentation.

Front 4

Apparent authority

Back 4

Agency relationship arises from reasonable belief of third parties as a result of P's holding A out as possessing certain authority, thereby inducing reasonable reliance by others on that authority

Front 5

Actual Implied Authority

Back 5

Implied authority is authority that the agent reasonably believes she has a result of the principal's actions

Front 6

Termination of Actual Authority

Back 6

1) Lapse of a specified or reasonable time;
2) The happening of a specified event;
3) A change in circumstances, incl destruction of the subject matter of the authority, insolvency of the agent or principal, and a change in the law or business conditions;
4) A's breach of fiduciary duty;
5) Either party's unilateral termination; or
6) operation of law (DEATH/incapacity of either party unless durable power of attorney)

Front 7

Lingering Authority

Back 7

Where an agent's actual authority has been terminated, he will still have APPARENT authority to act on P's behalf as to all third parties with whom P knows A dealt with UNLESS AND UNTIL the third parties receive actual or constructive notice of the termination.
Note: death or incompetency of P terminates all authority of the agency w/o notice to either A or 3P.
Note: If principal has given the agent a writing manifesting her authority that is meant to be shown to third parties, the agent's apparent authority will NOT be terminated wrt third parties who see an rely on such writing after termination of the agent's authority.

Front 8

Ratification

Back 8

Agency relationship is created by ratification when an "agent" purports to act on behalf of P without any authority at all, but P subsequently validates the act and becomes bound.
To ratify, P must know or have reason to know all material facts, accept the transaction, and have capacity.

Front 9

Liability for Agent's Torts

Back 9

Doctrine of respondeat superior imputes joint and several liability to the employer-principal for torts committed by an employee-agent within the scope of the employee's employment.
Requires 1) employer-employee relationship; and 2) Conduct within the scope of employment

Front 10

When is there an employer/employee relationship?

Back 10

1) Agreement by both parties
2) Benefit to employer
3) Right to control the manner of performance

Front 11

Liability for Acts of Independent Contractors

Back 11

Generally none unless:
i) inherently dangerous activities are involved;
ii) nondelegable duties have been delegated; or
iii) P knowingly selected an incompetent IC

Front 12

Scope of Employment

Back 12

1) 'ee conduct is similar or incidental to that which was authorized
2) mere detour
3) motivation to serve employer

Front 13

Frolic

Back 13

Major deviation from scope of employment.
Employer is not liable.
Note: 'er ownership of the vehicle driven by 'ee at the time 'ee commits a tort does not automatically impose liability on the employer for the tort.

Front 14

When is employer liable for employee's intentional torts?

Back 14

1) the conduct was a natural incident of employee's duties(e.g. bouncer);
2) where employee is promoting employer's business; or
3) where the nature of the work gives rise to hostilities (e.g. bounty collector)

Front 15

When is agent liable for contracts entered into on behalf of principal?

Back 15

If either existence of principal-agent relationship is omitted OR identity of principal is omitted

Front 16

Agent's fiduciary duties

Back 16

1) duty of loyalty
2) duty to obey reasonable directions; and
3) duty of care (incl duty to disclose all relevant information)

Front 17

Agent's duty to obey

Back 17

Even through a P-A relationship exists regardless of whether A is compensated, the reasonableness of P's instructions will take into account whether or not A is being paid

Front 18

Does an agent have to be compensated for the relationship to exist?

Back 18

No.
But if agency agreement is silent regarding compensation, the agent is entitled to REASONABLE compensation.

Front 19

What id an agency relationship

Back 19

An agency is a consensual relationship that arises when one person (the "principal") manifests an intention that another person (the "agent") shall act on the principal's behalf

Front 20

Essay language - forming principal and agent relationship

Back 20

In order to form an agency, both the principal and the agent must consent to the relationship. Furthermore, both must have capacity; the principal needs contractual capacity, while the agent must have only minimal mental capacity. In most cases, a writing is not required unless dictated by the equal dignities doctrine. No other formalities are required.

Front 21

Duties owed by principal to agent

Back 21

1) duty to compensate and reimburse an agent for expenses or losses incurred in discharging the agent's duties
2) duty to indemnify agent for any legal liability reasonably incurred by the agent in acting for the principal (unless the liability was due to the agent's own fault); and
3) duty to compensate the agent reasonably for his services (unless agent has agreed to act gratuitously). Where A has breached his fiduciary duty, P may refuse to pay the agent for compensation attributable to the particular transaction in question.

Front 22

Essay - actual authority

Back 22

Actual authority is that authority the agent reasonably believes he possesses based on the principal's dealings with him.