Ga Agency

Front 1

3 Main Agency Issues

Back 1

1. Liability of Principal to Third Party torts of an Agent

2. Liability of a Principal to Third Party for a contract entered into by an Agent.

3. Duties which an Agent owes to a Principal

Front 2

What is vicarious liability?

Back 2

Vicarious liability is when a principal is liable for the torts committed by their agent.

Front 3

What is the test for vicarious liability?

Back 3

Vicarious liability will exist if the following are met:

1. a principal-agent (P-A) relationships exists; AND
2. the tort was committed within the scope of the P-A relationship.

Front 4

When does a P-A relationship exist?

Back 4

You have to look at three factors to see if P-A exists.

1. Assent
2. Benefit
3. Control

Front 5

Assent

Back 5

Assent is an agreement that creates the P-A relationship. The agreement must be voluntary and consensual.

P must have legal capacity to enter into the relationship with A.

There are no formal writing requirements for the agreement, oral evidence will suffice to prove existence or P-A relationship.

Front 6

Benefit

Back 6

The agent's conduct is for P's benefit and furthers P's objectives.

Front 7

Control

Back 7

P must have the right to control A's manner and method of performance.

Control is most important of ABC factors.

Front 8

Sub-Agents and Borrowed Agents

Back 8

In order to determine whether a P has a P-A relationship with Sub-agents and Borrowed Agents, an analysis looking at assent, benefit, and control must be done.

Front 9

What is the difference between Agents and Independent Contractors?

Back 9

Unlike agents, a principal does not have control over an independent contractor's manner and method of performance.

In general, a principal is not vicariously liable for an independent contractor.

Front 10

Exceptions to vicarious liability between principal and independent contractor

Back 10

A principal can be liable for a independent contractor's torts, despite the lack of control the P has over the manner and method of the independent contractor's performance when:

1. Ultra Hazardous Activity Exception: The independent contractor is hired to do something that is inherently dangerous involving real risk to a third party and commits a tort.

2. Estoppel: P holds out the Independent Contractor as an Agent, which a 3rd party relies on. P is estopped from denying P-A relationship.

3. Non-delegable duties: Principal can not delegate the duty to another party?

Front 11

Was Agent's actions within the scope of the P-A relationship?

Back 11

1. Was conduct "of the kind" agent was hired to perform?
2. Did the tort occur "on the job?" (Frolic v. Detour)
3. Did agent intend to benefit the principal?

Front 12

Frolic v. Detour

Back 12

Frolic: a new and independent journey; a major deviation from employer's direction (outside the scope)

Detour: a near departure from an assigned task, minor deviation from employer's direction (inside the scope)

Front 13

Intentional Torts and Scope of P-A Relationship

Back 13

In general, intentional torts are outside the scope of the P-A relationship.

Exceptions. Intentional torts are within the scope of conduct if:
1. Authorized by the P;
2. A natural incident to carrying out employer's directions; or
3. Motivated by a desire to serve P.

Front 14

When is a principal liable for contracts entered into by its agent?

Back 14

1. Principal is liable if Principal authorized the agent to enter the contract. (P is liable only on its authorized contract).

Exception: If principal is partially disclosed (only the identity of the principal concealed) or undisclosed (fact of principal concealed) authorized agent may nonetheless be liable at the election of the third party.

2. If agent has no authority to enter contract, then agent is liable on the contract.

Front 15

4 Types of Authority

Back 15

1. Actual Express Authority
2. Actual Implied Authority
3. Apparent Authority
4. Ratification

Front 16

Actual Express Authority

Back 16

Principal used words to express authority to agent.

Actual express authority can be oral and private communication, but it is narrowly construed.

If a contract needs to meet a S.O.F. requirement, then authorization must be in writing as well.

Front 17

Revocation of Express Authority

Back 17

Can be revoked by:

1. Unilateral act of either the principal or the agent, or
2. Death of the principal
3. Incapacity of Principal (unless agent given the durable power of attorney)

Front 18

Actual Implied Authority

Back 18

Authority which the principal gives the agent through conduct or circumstances:

1. Necessity
2. Custom
3. Prior dealings b/w the principal and the agent

Front 19

Necessity

Back 19

There is implied authority to do all tasks necessary to accomplish an expressly authorized task.

Front 20

Custom

Back 20

There is implied authority to do all tasks customarily performed by persons with agent's title and position, unless the agent is specifically directed otherwise.

Front 21

Prior Dealings b/w P and A

Back 21

There is implied authority to do all tasks if agent reasonably believes that it is authorized to do so, based on P's authorization and acts.

P's silence can imply authority to continue doing things the same way as before.

Front 22

Apparent Authority

Back 22

1. Principal "cloaked" agent with the appearance of authority; and
2. Third party reasonably relies on appearance of authority.

Front 23

Ratification

Back 23

Authority can be granted after the contract has been entered if:

1. Principal has knowledge of all material facts regarding the contract, and
2. Principal accepts is benefits.

Exception: Ratification cannot alter the terms of the contract.

Front 24

Duties Agent Owes to Principal

Back 24

Duty of Reasonable Care

Duty to obey reasonable instructions

Duty of loyalty

Front 25

Agent prohibited from:

Back 25

Self-dealing: A cannot receive benefit to the detriment of the P.

Usurping the P's opportunity

Secret Profits: Making a profit at the principal's expense without disclosure.