Term
| 3 characteristics of an agency relationship |
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Definition
1. Agents must agree to act for the benefit for the principle
2. Agent must have capacity to act (not a minor or mentally incapitated, can void)
3. Duties must be delegable
- Duties that require principal's personal performance
- Voting, signing a will, testifying under oath, etc. |
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Term
| What are the 2 types of agent authority |
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Definition
1. Actual authority
2. Apparent authority |
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Term
| When is a principal not bound by the agent's acts |
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Definition
| If an agent does not have authority (actual or apparent) |
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Term
| 2 basic forms of actual authority |
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Definition
1. Express- Based on the principal's statements to the agent ("I want to hire you as a realtor to sell my house")
2. Implied- Whatever is reasonable for the agent to do given the principal's statements to the agent and the surrounding circumstances |
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Term
| When does apparent authority arise? |
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Definition
| When a principal's conduct leads a third party to believe that an agent (who lacks actual authority) is authorized to act a certain way, and the third party reasonably relies on the appearance of authority |
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Term
| Who is apparent authority meant to protect? |
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Definition
The third-party, makes the principal liable for actions of something they think is an agent
- Risk assumed in exchange for the benefit of someone acting on their behalf |
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Term
| Factors used to determine if someone is an employee or independent contractor |
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Definition
1. Right to control physical details
2. Skill required
3. Source of work
4. Location of work
5. Schedule control
6. Duration of Relationship
7. Payment method
8. Benefits and tax treatment
9. Uniqueness of work |
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Term
| 5 Duties an agent owes to a principal |
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Definition
1. Duty of loyalty
2. Duty to obey instructions
3. Duty to act with care and skill
4. Duty to notify principal
5. Duty to account |
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Term
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Definition
Avoid self-dealing, competing with principal (starting a competing business w/ employer, stealing clients), and conflicts of interest
- Maintain confidentiality of principal's information (during and after agency) |
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Term
| Duty to obey instructions |
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Definition
Obey principal's reasonable, legal, and ethical instructions
- if unethical, there is grounds to prove you are not obligated to complete it |
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Term
| Duty to act with care and skill |
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Definition
You have the responsibility to act to the best of your skill
- Duty to exercise care in some dangerous situations (if act recklessly, you have violated duty to the principal) |
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Term
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Definition
| Notify the principal of matter reasonably relevant or material to the agency business |
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Term
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Definition
To the extent that you receive, duty to notify your principal
- If principal requests it, you must turn over the money to your principal
- i.e. someone who is negotiating to buy products, 1 of suppliers sweetens the deal by giving a gift to professional buyer, the buyer (as the agent) has a duty to account for that gift to the employer
- If employee asks you, you must give it to owner |
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Term
| Duties implied by law that the principal must provide the agent |
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Definition
1. Duty of compensation (to pay the agent)
2. Duty to reimburse the agent for money spent doing the principal's business
3. Duty to indemnify the agent for losses suffered in doing the principal's business
- To compensate for damage, loss, or injury suffered
- If agent gets sued, liable for the agent (pay for legal fees, losses, judgment against them) |
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Term
| 2 ways to terminate agency |
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Definition
By act of the parties
By operation of Law |
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Term
| Termination by act of the parties |
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Definition
1. At a time or event stated in the agreement
2. When agency was created to achieve a special purpose, and it is achieved
3. By mutual agreement of the parties
4. At the option of either party |
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Term
| Termination of agency by operation of law |
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Definition
1. Serious breach of the agent's duty of loyalty
2. Principal's permanent loss of capacity or agent's loss of capacity to perform agency business (goes insane, having an accident and getting hurt when physical activity is needed)
3. Impossibility of performance by the agent
4. Death or bankruptcy of principal or agent
5. Change in value of agency property or subject matter (including loss or destruction)
6. Changes in the law making the agency illegal
7. Changed business conditions or outbreak of way (except, agency related to war) |
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Term
| Effect of termination of agency (actual authority) |
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Definition
Ends when agency terminates
- But agents can still have apparent authority
- A person may still have authority to enter into contracts or do things a principal is liable |
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Term
| When does apparent authority end? |
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Definition
Ends automatically when 1) principal dies 2) principal loses capacity and 3) performance of the agent becomes impossible
- Otherwise, apparent authority ends when
1. Actual notice is given to the third parties that have dealt or are dealing with the agent
2. Constructive notice is given to third parties who have never dealt with the agent (print in newspaper, post in public places, set up auto-reply email, post something at your office) |
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Term
| When is a principal liable for contracts by agent |
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Definition
If the agent had actual authority (express or implied) or apparent authority to enter into the contract for the principal
- If the agent doesn't have authority, the principal is not bound by the contract unless it chooses to ratify the contract |
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Term
| 4 Types of situations in which an agent makes a contract for a principal |
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Definition
Disclosed Principal
Partially Disclosed Principal
Undisclosed Principal
Nonexistent Principal |
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Term
| Disclosed Principal (who is liable) |
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Definition
When the 3rd party knows or has reason to know 1) the agent is acting for a principal and 2) the identity of the principal
- Agent is not liable for authorized contracts made for a disclosed principal |
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Term
| Partially Disclosed Principal |
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Definition
Other party 1) knows or has reason to know the agent is acting for a principal, but 2) does not know or have reason to know the identity of the principal
- Agent is liable for authorized contracts made for partially disclosed principal unless the parties to the contract agree otherwise |
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Term
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Definition
3rd Party does not know or have reason to know that the agent is acting for a principal (and so doesn't know or have reason to know the principal's identity)
- Other party can choose to hold either the agent or principal liable |
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Term
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Definition
| Agent is liable for contracts for non-existent principals |
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Term
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Definition
A principal is vicariously liable for an agent's torts if:
1. The agent is an EMPLOYEE
2. The agent commits the tort while acting "within the scope of employment"
- Does not apply to independent contractors |
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Term
| The 4 tests that must be met for an employee to be acting "within the scope of employment" |
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Definition
1. The conduct was the kind that the employee was employed to perform
2. The conduct occurred substantially within the authorized time period for work
3. The conduct occurred substantially within the location authorized by the employer for work
4. The conduct was motivated at least in part by the purpose of serving the employer |
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Term
| When can an employer be directly liable for an agent's torts |
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Definition
Where:
1. The employer directs the act
2. The employer intended that the act occur
- Providing negligent instructions or improper tools |
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Term
| What situations can a principal be held directly liable for an independent contractor's torts? |
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Definition
1. A principal negligently hires an independent contractor
2. A principal is liable for harm caused by an independent contractor's failure to perform a non-delegable duty (important duties that cannot be contracted away, usually safety related
3. A principal is liable for an independent contractor's failure to take special precautions |
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Term
| The elements of a negligence claim |
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Definition
Duty
Breach
Causation
Injury |
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Term
| To whom does a person owe a duty of care? |
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Definition
1. The reasonably foreseeable victims of the person's acts
2. People that have a special relationships with the person (e.g. doctor-patient) |
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Term
| What types of duties of care is owed to others? |
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Definition
1. General rule: "Reasonable care"
- The care a reasonable person with the defendant's personal characteristics would exercise
- Professionals are held to the standard of care of members of the profession
2. Special duties of care exist in certain situations
- E.g. property owners' duty to people on their property |
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Term
| 3 types of people a property owner owes a duty of care |
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Definition
1. Invitees
2. Licensees
3. Trespassers |
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Term
| Duty of care owed to invitees |
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Definition
- Business owners or public invitees on the premises for defendant's purpose
- Property owners have a duty to use reasonable care to protect invitees against dangerous conditions on the premises that the owner knows or should know about and that invitees are unlikely to discover |
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Term
| Duty of care owed to licensees |
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Definition
- A person on property with express or implied consent for the licensee's own purposes (e.g. social guests, door-to-door salesmen)
- Property owners have a duty only to warn the licensees of dangerous conditions on the property that the licensees are unlikely to discover |
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Term
| Duty of care owed to trespassers |
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Definition
- A person on property without consent
- Property owners have a duty to avoid willfully or wantonly injuring trespassers once the trespasser's presence is known |
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Term
| Objective test of Breach of duty of care |
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Definition
| Defendant's actions are measured against the actions of a reasonable person |
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Term
| Factors to consider in the breach of duty objective test |
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Definition
1. Foreseeability of harm
2. Seriousness and magnitude of the foreseeable harm
3. Social utility of defendant's conduct
4. Ease or difficulty of avoiding risk |
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Term
| What is Negligence per se? |
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Definition
Negligence based on the violation of a law
- establishes duty of care and breach as a matter of law |
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Term
| What proof is required in negligence per se? |
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Definition
1. Plaintiff is within the class of people intended to be protected by the law
2. Plaintiff suffered the sort of harm that the law was intended to protect against |
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Term
| What must occur for someone to be negligent in terms of causation? |
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Definition
| The defendant's acts must be both the actual cause and proximate cause of the plaintiff's injury |
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Term
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Definition
| a0 "But for" defendant's breach, the injury would not have happened; or b) defendant's breach was a "substantial factor" in causing the injury |
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Term
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Definition
| a) injury is "natural and probably consequence" of defendant's breach; or b) injury is within the scope of foreseeable risk |
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Term
| What is an intervening cause? |
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Definition
| An unforeseeable act or event that occurs after the defendant's acts that contributes to plaintiff's injury |
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Term
| 2 types of intervening cause |
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Definition
1. A foreseeable intervening cause does not prevent liability for intervening injury
2. An unforeseeable intervening cause (i.e. unforeseeable victim or type of harm) does prevent liability for intervening injury |
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Term
| "Thin-Skulled" Plaintiff rule |
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Definition
| Defendant "takes his victims as he finds them" (i.e. the extent of plaintiff's injury does not have to be foreseeable |
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Term
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Definition
Special doctrine in which a defendant has special/exclusive knowledge of how an injury occurred
- A means for the plaintiff show the defendant caused the harm |
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Term
| Res Ipsa Loquitor applies where plaintiff shows what 3 things? |
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Definition
1. Defendant had exclusive control of the instrument of harm
2. The hard the plaintiff suffered ordinarily does not occur unless someone has been negligent; and
3. Plaintiff is in no way responsible for his/her injury |
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Term
| What type of presumption does res ipsa loquitur create? |
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Definition
The defendant breached duty and caused plaintiff's injury
- Shifts burden to the defendant to show it was not negligent (i.e. exercised reasonable care) |
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Term
| 3 systems of Defenses to Negligence |
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Definition
Contributory Negligence
Comparative Negligence
Comparative Fault |
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Term
| Contributory Negligence System |
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Definition
A plaintiff cannot recover anything from a defendant if a plaintiff contributed to his/her injury in any way
- Assumption of risk is a complete defense to liability under this system |
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Term
| Comparative Negligence System |
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Definition
- "Pure": A plaintiff can recover whatever portion of its damages are attributable to the defendant's negligence
- "Mixed"- A plaintiff can recover whatever portion of its damages are attributable to the defendant's negligence only if the defendant's negligence is greater than the plaintiff's negligence
- Assumption of risk is a complete defense in this system |
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Term
| Comparative Fault Negligence |
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Definition
| Same as a comparative negligence system, except that "assumption of risk" is not a complete defense-it is merely one factor that the jury considers in comparing fault (rather than negligence) |
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Term
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Definition
Voluntary consent to known risk
- Express (e.g. exculpatory clause)
- Implied (facts showing acceptance of known risk)
- Complete defense to liability under "contributory negligence" and "comparative negligence"; a factor to consider under "comparative fault" |
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Term
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Definition
Liability without - or irrespective - of fault
- A defendant is liable even if the defendant didn't intend to cause harm and didn't act negligently |
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Term
| Describe the social policy decision made about strict liability |
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Definition
| Imposing strict liability is a social policy decision that the risk associated with an activity should be borne by those who pursue it, rather than by innocent persons who are exposed to that risk - the decision to engage in the activity justifies imposing strict liability for any resulting harm |
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Term
| Abnormally Dangerous Activities |
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Definition
| Activities that entail high risk of serious harm that can't be eliminated through reasonable care |
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Term
| Restatement factors of strict liability listed in Reid |
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Definition
- High degree of risk of harming others/land/property
- Likelihood that the harm that results will be great
- Inability to eliminate the risks by using reasonable care
- Extent to which the activity it not in common usage
- Inappropriateness of the activity to the place
- Extent to which its value to the community is outweighed by its dangerous attributes |
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Term
| Wild animals strict liability |
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Definition
Strict liability for "wild" animals (abnormally dangerous activity)
- Most common cases are Zoos (can also be a single person with a pet wild animal)
- There is no strict liability for "domesticated" animals |
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Term
| Statutory Strict Liability |
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Definition
Systems set up by legislation
- Workers compensation |
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Term
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Definition
- Manufacturing defects- the product does not meet the manufacturer's own standards
- Design defects- The products design poses an undue risk of harm when used as intended
- Inadequate warnings- The product fails to warn consumers or "learned intermediaries" about unexpected or hidden dangers |
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Term
| 2 tests used to determine design defects |
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Definition
- "feasible Alternative" test- Could the risk posed by the design be eliminated by an alternative design without affecting the utility or price
- "Consumer Expectation" test- Is the product as safe as an ordinary consumer would expect it to be |
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Term
| What must a plaintiff prove to recover for injury from defective products |
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Definition
1. The product has a defect
2. The defect is attributable to someone in the chain of manufacturing or marketing
3. The defect caused the plaintiff's harm
- This doesn't matter if there was negligence |
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Term
| 2 Limits on strict liability |
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Definition
1. The scope of the risk- Limited to the activities for which the law imposes strict liability
2. Proximate cause- If you engage in an abnormally dangerous activity, but that activity isn't the proximate cause, you won't be liable- not foreseeable harm |
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Term
| How is assumption of risk associated with strict liability |
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Definition
| Contributory/comparative negligence or fault are not defenses to strict liability |
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