Agency And Partnership: Agency, Authority

Front 1

Liability in Contract:

Principal becomes liable to third party through the actions of his agent if A and P both consent and A is subject to P's control

Back 1

Capacity: P must have contractual capacity, but A doesn't (just intermediary)

Writing: Agency law requires no writing, but SoF may [i.e., agent's authority to convey real property]

Consideration: not required

Front 2

Actual Authority

Back 2

1) Express: P tells A to act on P's behalf
- do whatever necessary to accomplish task
- exists even if P accidentally tells wrong person to act or tells right person to do wrong thing

2) Implied: P's conduct leads A to believe A has authority

Front 3

Termination of Actual Authority

Actual authority must exist when A enters a contract, since actual authority can terminate in a number of ways

Back 3

1) After a specified time, a reasonable time, or a specified event occurs
2) Change of circumstnaces (e.g., subject matter destroyed)
3) A acquires interest adverse to P's
4) A says so (agency is consensual)
5) P says so; unless power is irrevocable (**"coupled w/an interest"**)
6) Death, incapacity, or bankruptcy, unless power is irrevocable

Front 4

Delegation

Back 4

OK if P consents (may be express or implied from circumstances)

Front 5

Substitutes for Actual Authority

Back 5

Apparent Authority
Ratification
Adoption

Front 6

Apparent Authority

P leads T to mistakenly believe A has authority. Policy: protect innocent T who relies. ** Reasonable belief must be created by P, not A alone

Problem: Apparent authority can linger after actual authority ends

Back 6

To destroy actual authority: P tells A not to do it again!

To destroy apparent authority: P must tell 3d party that A has no authority (AA can exist in minds of many 3d parties!)

Front 7

Ratification

Even if "A" had no authority, "P" can ratify by expressly affirming the contract, accepting the benefit of it, or suing T on it

Back 7

1) Knowledge: P must have knowledge of all material facts

2) All or Nothing: P must accept entire transaction (can't ratify K and disavow one of A's misreps)

3) Capacity: P must have capacity at time of ratification and at time of original contract because ratification's retroactive

Front 8

Ratification: Intervening Rights

Back 8

Since ratification is retroactive, we must protect the intervening rights of a bona fide purchaser (BFP)

Can't cut off BFP's intervening rights

Front 9

Adoption

Back 9

Not retroactive.

Adopting party only liable from moment of adoption forward.