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25 Cards in this Set
- Front
- Back
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Capacity of Principal |
Any person having capacity to contract may appoint an agent. |
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Capacity of Agent |
Any person may be an agent, even if she has no contractual capacity herself. NOTE: if the law requires the agent to have a license (e.g., brokers, insurance agents), she cannot act without one. |
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Consent to Agency Relationship |
Consent must be manifested by both the principal and the agent to create an agency relationship. |
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Apparent Authority |
Where a principal holds out another as his agent to a third party. Apparent authority makes a principal a party to the contract, with contractual rights and liabilities. |
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Actual Authority |
Where the agent and principal agree that the agency shall exist. |
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Ratification |
Where the principal agrees to be bound by the previously unauthorized acts of another. |
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Duty to Indemnify |
A duty owed by the principal to the agent for all expenses or losses reasonably incurred by the agent in discharging any authorized duties. |
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Implied Actual Authority |
The authority that the agent reasonably believes she has as a result of the actions of the principal. |
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When is a person an employee? |
1. An (informal) agreement between a principal who has capacity and the agent 2. The agent's conduct is for the benefit of the principal 3. The principal has the right to control the agent by supervising the manner of the agent's performance |
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When is the principal liable for the torts of a sub-agent? |
The principal will be liable for a sub-agent's tort only if there is assent, benefit, and control between the principal and the sub-agent. |
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Respondeat Superior |
A principal will be liable for the torts of his agent when: 1. there is an employer-employee relationship, and 2. the conduct falls within the scope of employment. |
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Detour |
A minor deviation from an employer's directions, which generally falls within the scope of employment. |
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Frolic |
A major detour from an employer's directions, which falls outside the scope of employment. |
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What is required for the possessor of goods to be able to transfer good title without authority? |
The possessor must have either: 1. some indicia of ownership (e.g., title), or 2. be a dealer in goods of that kind. |
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Inherent Authority |
Derived solely from the agency relationship, inherent authority results in a principal being bound by his agent's acts in certain situations even though the agent has no actual or apparent authority. |
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Express Authority |
The type of actual authority contained within the four corners of an agency agreement. |
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Disclosed Principal |
A principal whose existence and identity are known to the third party. A disclosed principal is always liable on a contract entered into by an authorized agent. |
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Unidentified Principal |
Where the third party knows of the principal's existence but does not know his identity, both the authorized agent and the principal are liable on the contract. |
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Undisclosed Principal |
Where the third party does not know of the principal's existence or his identity, both the agent and the principal are liable on the contract entered into by an authorized agent. |
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In what actions is a principal liable for damages caused by an incompetent contractor? |
A principal will be liable to an injured third party for the principal's negligence in selection. A principal will be liable for the independent contractor's negligence if the principal hired the incompetent contractor with knowledge of the contractor's incompetence. |
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What duties are owed by an agent to a principal? |
1. Loyalty 2. Obedience 3. Reasonable Care |
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Duty of Just Compensation |
A principal owes her agent a duty to compensate him reasonably for his services, unless the agent has agreed to act gratuitously. |
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What duties are owed by a principal to an agent? |
1. Just compensation 2. Indemnity 3. Cooperation 4. Whatever duties may be imposed by a contract with the agent |
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Which agency relationships may not be unilaterally terminated by the principal? |
1. Relationships where the agent has an interest in the subject matter of the agency, or 2. A power is given for security |
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Who is liable under the doctrine of respondeat superior for the torts of a borrowed employee? |
Whoever has control of the employee, whether borrowing employer or lending employer. |
