Management 4540 Chapter 32 - Agency Liabilities And Formation

Front 1

List the three types of agency authority:

Back 1

1. Actual authority arises by consent
a. Express authority: specific language
b. Implied authority: general grant of authority implies certain included authority

2. Apparent authority arises by estoppel
a. principal must create appearance of agency

3. Ratification: Authority by ratification

Front 2

Three levels of disclosure of agency:

Back 2

1. Undisclosed principal: Neither existence nor identity of principal is known to third party

2. Partially disclosed principal: The existence but not the identity of principal known to third party.

3. Fully disclosed principal: both the existence and identity of principal known to third party.

Front 3

List the two primary rules of liability of principals for agent's acts:

Back 3

1. The principal is liable for contracts of an agent who acts with actual authority whether the principal is disclosed or undisclosed.

2. Where the agent acts without actual authority, the principal is not liable for the purported agent's acts unless there is agency by estoppel or by ratification.

Front 4

List the three primary rules of liability of agents:

Back 4

1. An agent of a fully disclosed principal is not liable to the third party so long as the contract is within the agent's actual authority.

2. An agent entering a contract in excess of his actual authority is liable to the third party for the breach of contract of implied warranty or authority.

3. An agent of an undisclosed or partially disclosed principal is liable to the third party for contracts made on behalf of the principal.

Front 5

List the two general rules of tort liability:

Back 5

1. The principal is liable for his/ her own torts.
a. directing an agent to perform a tort.
b. Negligent hiring or supervision
2. An agent is liable for his/ her own torts.
a. unlike some contracts, even if the principal is liable, the agent also remains liable for his own torts in a joint tort feaser.

Front 6

Respondeat Superior

Back 6

An employer is liable for the torts of an employee acting in the scope and course of employment.

Front 7

Two requirements of respondeat superior

Back 7

An employer/ employee relationship

The employee commits the tort in the scope and course of employment.

Front 8

Scope of employment:

Back 8

Within the kind of work that the employee was hired to do.

Front 9

Course of employment:

Back 9

Substantially within time and space limitations.

Front 10

Going and coming rule:

Back 10

Generally, an employer is not liable for the torts of an employee that is going to or from home or lunch.

Front 11

Frolic:

Back 11

The employer is not liable for a frolic - a major deviation from scope and course. > 30 miles

Front 12

Detour:

Back 12

The employer is liable for a detour - a minor deviation from scope and course. < 30 miles

Front 13

Dual purpose doctrine:

Back 13

Where at the time of the tort the employee is acting in part in the employer's interest, then the employer is liable

Front 14

Intentional torts - list the three general rules of liability:

Back 14

1. The employer is liable for excessive force if force is part of the job.

2. In some states, the employer is liable for the use of force if force was used to serve the master's business (not for personal quarrels)

3. For non-physical intentional torts like fraudulent misrepresentation, the principal is liable for the agent's action.

Front 15

List the four ways to terminate an agency by operation of law:

Back 15

1. Death or incapacity of principal or agent

2. Bankruptcy of principal or agent

3. Drastic change in circumstances

4. Impossibility

Front 16

List the four ways to terminate an agency by ways of the parties:

Back 16

1. Initial or subsequent agreement of both parties

2.Lapse of a stated time

3. Occurence of a contemplated event

4. By one party with or without cause.

Front 17

Termination of the agency by one party: an agency at will-

Back 17

An agency without a specific time comittment is usually teminable by either party at either time

Front 18

Termination of the agency by one party: Agency for a term -

Back 18

Defined: An agency contracted for a certain time period

1. Termination: The parties have the power to terminate at any time, but not the right: termination without cause results in contractual liability
a. exception: agency coupled with an interest may not be terminated by the principal

3. May be terminated by one party for a breech of contract or duty by the other party.

Front 19

Termination of agency authority: Actual authority

Back 19

Terminates upon notice to the agent

Front 20

Termination of agency authority:Apparent authority

Back 20

Terminates upon notice to third parties:

1. Direct notice to those with whom the agent directly dealt

2. Notice by publication to others