Mbfe 653: Chapter 36 - Third Party Relations Of The Principal And The Agent

Front 1

When a principal communicates and intent to ratify by words, whether written or oral

Back 1

Express ratification

Front 2

When the principal's behavior evidences an intent to ratify.

Back 2

Implied ratification

Front 3

(1) The act ratified must be one that was valid at the time it was performed. (2) The principal must have been in existence at the time the agent acted. (3) When the act occurred, the agent must have indicated to the third party that they were acting for a principal and not for themselves, but did not have to reveal the principal's identity. (4) The principal must be legally competent at the time of ratification. (5) The principal must have knowledge of all the material facts. (6) The principal must ratify the entire act or contract. (7) The principal must use the same formalities required to give the agent the authority to execute the transaction.

Back 3

Typical requirements for ratification

Front 4

(1) The third party's withdrawal from the contract. (2) The third party's death or loss of capacity. (2) The principal's failure to ratify within a reasonable time. (4) Changed circumstances.

Back 4

Intervening events after an agents contract but before a principal's ratification

Front 5

When a third party knows or has reason to know (1) that the agent is acting for a principal, and (2) the principal's identity. The agent is not liable.

Back 5

Disclosed Principal

Front 6

When the third parties (1) knows or has reason to know that the agent is working for a principal, but (2) lacks knowledge or reason to know the principal's identity. The agent is liable unless the parties agree otherwise.

Back 6

Partially Disclosed Principal

Front 7

When the third party lacks knowledge or reason to know both the principal's existence and the principal's identity. The agent is liable.

Back 7

Undisclosed Principal

Front 8

(1) The third party actually knows the agent lacks authority. (2)The principal ratifies the contract. (3) The agent adequately notifies the third party that he does not warranty his authority to contract.

Back 8

Situations where an agent is not liable

Front 9

An employer is liable for torts committed by agents (1) who are employees and (2) who commit the tort while acting within the scope of their employment..

Back 9

Respondeat Superior (Let the master answer)

Front 10

(1) The work was of the kind that the employee was employed to perform (2) It occurred within the authorized time period. (3) It occurred substantially with the location authorized by the employer. (4) It was motivated in part by the purpose serving the employer.

Back 10

Respondeat Superior Scope of Employment Test

Front 11

The principal themselves is at fault and there is no need to impute liability to them.

Back 11

Direct liability

Front 12

(1) Agent must be an employee (2) Employee must act within scope of employment while committing the tort.

Back 12

Respondeat Superior (Principal's Tort liability)

Front 13

(1) Principal intends and directs agent's intentional tort, recklessness, or negligence, or (2) Principal is negligent regarding hiring or training of agent.

Back 13

Direct Liability (Principal's Tort liability)

Front 14

(1) Principal generally is not liable. (2) Exceptions for direct liability, highly dangerous activities, and nondelegable duties

Back 14

Torts of Independent Contractors (Principal's Tort liability)

Front 15

(1) Direct liability. (2) Vicarious liability when agent has authority to make true statements on the subject of the misrepresentation. (3) An exculpatory clause may eliminate the principal's tort liability, but the third party still can rescind.

Back 15

Misrepresentation (Principal's Tort liability)