Term
|
Definition
| when one person (the principal) manifests an intention that another person (the agent) shall act on his behalf. |
|
|
Term
|
Definition
Consent
Principal must have contractual capacity
Agent needs only minimum capacity
No consideration or writing required |
|
|
Term
|
Definition
| If the subject of an agency relationship is under SOF, agency contract must be under SOF |
|
|
Term
|
Definition
i. agent and principal agree
2. principal holds out another to his agent as third party
3. principal may agree to unauthorized acts |
|
|
Term
| Modes of creation: operation of law |
|
Definition
Estoppel: apparent authority makes the principal a party to the contract- without contractual rights and liabilities- whereas estoppel is merely a remedy to protect innocent party against loss
Statute |
|
|
Term
| Duties of agent to principal |
|
Definition
TERMS OF AGREEMENT
Loyalty
Obedience
Care |
|
|
Term
|
Definition
| The fiduciary duty of an agent to his principal is one of undivided loyalty. |
|
|
Term
|
Definition
| An agent must obey all reasonable directions of his principal. |
|
|
Term
|
Definition
| An agent owes a duty to her principal to carry out her agency with reasonable care, in light of the local community standards |
|
|
Term
|
Definition
| The duty of care includes a duty to notify the principal of all matters that come to the agent's knowledge affecting the subject of the agency |
|
|
Term
|
Definition
Breach of K? (REMEMBER: K requires consideration. Thus, must be compensated)
Tort: all agents
Action for secret profit
Accounting
Withholding compensation (intentional torts/breaches) |
|
|
Term
| Action for secret profits |
|
Definition
| Example: A sells good for over price and realizes additional money. Additional money belongs to P. |
|
|
Term
| Duties of subagent to principal agent |
|
Definition
Where a subagent has been appointed with proper authority, she too will owe the principal the same duties as would the agent.
Agent always liable for subagent breach. |
|
|
Term
| Liability of subagent to agent |
|
Definition
| Subagent owes the agent the same duties she owes the principal; thus, she will be liable to the agent for her breaches |
|
|
Term
|
Definition
| Where the subagent has been appointed without authority, the subagent owes no duties to principal |
|
|
Term
| Duties of Principal to Agent |
|
Definition
1. Compensation
2. Reimbursement
3. TERMS OF AGREEMENT
4. Duty to cooperate: help agent carry out duties |
|
|
Term
|
Definition
Breach of contract
Agent's lien |
|
|
Term
| Real estate broker: exclusive contract |
|
Definition
An exclusive contract entitles a real estate broker to her commission if she or anyone else
Nonexclusive: broker furnishes buyer |
|
|
Term
|
Definition
Power AGENT REASONABLY THINKS SHE POSSESSES.
Principal will be bound regardless of whether the third party knew of the agent's authority, and the agent cannot be held liable to the principal for breach because she acted within scope of her authority. |
|
|
Term
| Types of actual authority |
|
Definition
Express or implied
Express: contained in the agreement.
Implied: agent reasonably believes that she has as a result of the actions of the principal. |
|
|
Term
| Implied authority from express authority |
|
Definition
| Express authority granted to an agent to accomplish a particular result necessarily implies authority to use all means reasonably necessary for accomplish. |
|
|
Term
| Agent Authority to Delegate |
|
Definition
Generally, an agent's authority will not be construed to permit her to delegate any of her authority.
Exceptions: (1) ministerial acts; (2) delegation required by circumstances; (3) custom; (4) impossibility. |
|
|
Term
| Implied authority: authority to purchase |
|
Definition
| Authority to pay and authority to accept delivery |
|
|
Term
| Implied authority: authority to sell |
|
Definition
| Authority to warrant, authority to collect, authority to deliver |
|
|
Term
| Termination of actual authority: time lapse |
|
Definition
| Specified time OR reasonable time |
|
|
Term
| Termination of actual authority: |
|
Definition
1. time
2. by happening of event
3. Change in circumstances
4. Breach of agent's fiduciary duty
5. Unilateral act of principal or agent
6. Operation of law |
|
|
Term
| Termination of actual authority: change in circumstances |
|
Definition
a. Destruction of the subject matter authority
b. a drastic change in business conditions
c. a change in relevant laws
d. insolvency of agent or principal |
|
|
Term
| Termination of actual authority: unilateral act |
|
Definition
Either the principal or the agent can unilaterally terminate the agency relationship.
Communicate termination.
Can terminate, but look for breach |
|
|
Term
| Termination of actual authority: operation of law |
|
Definition
| Death or loss of capacity by either party, dissolution of a corporation or partnership, insanity of person |
|
|
Term
| Durable power of attorney |
|
Definition
| a power of attorney is a written instrument an authorizing agent to perform specific acts and is usually used by the agent to evidence his authority to third parties. |
|
|
Term
|
Definition
1. Agent has an interest in subject matter
2. Power is for security. |
|
|
Term
|
Definition
| Where the principal holds out another possessing certain authority, thereby inducing others reasonably to believe that authority exists the agent has apparent authority to act |
|
|
Term
|
Definition
The principal must have done or so failed to do something that causes the third party's belief.
Mere assertion of agent is insufficient. |
|
|
Term
| Apparent authority: imposters |
|
Definition
| When the principal negligently permits an imposed to be in a position where the imposter appears to have authority to act for the principal, the principal will be held liable for the imposter's act undertaken with such authority. |
|
|
Term
| Apparent authority: death or incompetency |
|
Definition
| Death or incompetency of the principal terminates all authority of the agent without notice to either the agent or third parties. |
|
|
Term
| General vs. special agent |
|
Definition
A general agent is one who is authorized to engage in a series of transactions involving a continuity of service.
Special agents do not have any continuity of service. |
|
|
Term
| Apparent authority: inherent authority |
|
Definition
| Inherent authority results in a principal being bound by his agent's acts in certain situations even though the agent has no actual authority |
|
|
Term
| Improper disposition of goods |
|
Definition
Issue: one recurring problem is the improper disposition of goods by a person to whom they have entrusted
Mere possession is insufficient
Need an indica of ownership |
|
|
Term
|
Definition
There are several situations in which the ratifaction is considered effective on the date of ratification and does not relate back.
Principal is deemed to have ADOPTED K |
|
|
Term
|
Definition
Principal has or reasonably should have knowledge of the material facts at time of affirmance.
Principal must accept the entire transaction.
Principal must have capacity, no consideration needed. |
|
|
Term
|
Definition
1. Express
2. Implied (acceptance, silence, suit to enforce) |
|
|
Term
| Ratification: withdrawal by third party |
|
Definition
| If prior to ratification, the third party indicates that she will not be bound by the contract, the principal will not ratify. |
|
|
Term
| Ratification: material change of circumstances |
|
Definition
| Where there has been a material change of circumstances so that it would not be equitable to hold the third party to the contract, there can be no ratification. |
|
|
Term
|
Definition
Only the principal
No ratification by undisclosed principal. (third party never relied) |
|
|
Term
| Third party vs. principal |
|
Definition
| If the agent had authority, principal is liable. |
|
|
Term
| Third party vs. agent: disclosed principal |
|
Definition
A disclosed principal is one whose existence and identity are known to the third party.
Disclosed principals are liable, agents generally not liable. |
|
|
Term
| Disclosed principal: agent liability to third party |
|
Definition
1. TERMS OF AGREEMENT
2. IMPLIED WARRANTY OF AUTHORITY |
|
|
Term
| Implied warranty of authority |
|
Definition
When an agents enters into a contract purportedly on behalf of principal, agent makes an implied warranty of authority.
Mainly, that the agent has authority to enter into transaction.
Disclosed principal, can be held liable |
|
|
Term
| Third party vs. agent: undisclosed principal |
|
Definition
A partially disclosed principal is one whose existence, but not identity, is known to the third parties.
An undisclosed principal is one whose existence and identity are unknown.
Both principal and agent are liable. Third party can elect who to bind prior to judgment. |
|
|
Term
| Right to hold third party liable to contract |
|
Definition
Disclosed principal: principal can enforce K
Partially disclosed / undisclosed: either principal or agent can enforce contract |
|
|
Term
| Situations where principal may not enforce contract against third party |
|
Definition
1. Fraudulent concealment of principal's identity (needs affirmative action)
2. Increase of Burden to third party |
|
|
Term
| Respondeat Superior: Elements |
|
Definition
1. Employer-employee relationship
2. Conduct within scope of employment
Liability is derivative, joint and several.
Could be direct. |
|
|
Term
| Employee or independent contractor |
|
Definition
The single overriding factor in determining whether a person is an employee is whether the principal has the right to control the manner and method by which the person performs his task.
Apply to borrowed employees. |
|
|
Term
| Determination of control: factors |
|
Definition
1. Characterization by parties 2. Distinct business 3. Custom regarding supervision 4. Skill required 5. Tools and facilities 6. Period of employment
7. Basis of compensation 8. Understanding 9. Business purpose |
|
|
Term
| Respondeat superior: subservants |
|
Definition
| A principal may also be liable for the torts committed by a duly authorized subservant. In determining whether a subservant is authorized, you have to determine whether the person who hired him had an authority to do so. |
|
|
Term
| Employer-employee estoppel |
|
Definition
| Where the principal creates the appearance that an employer-employee relationship exists, and a third person relies upon the appearance, the principal may be estopped from denying the existence of the relationship. |
|
|
Term
| Liability for acts of independent contractors |
|
Definition
1. Inherently dangerous activities
2. Selection of an incompetent contractor
KNOWING = contractor's negligence
Negligence = own negligence
3. Nondelegable duties (ex. landowner) |
|
|
Term
|
Definition
Same general nature?
Substantially removed from the authorized time and space limits of the employment?
Part purpose to serve employer? |
|
|
Term
| Scope of employment: authorization |
|
Definition
| To be within the scope of employment, the employee's conduct does not have to be actually authorized. Furthermore, the fact than an act was forbidden by the employer or performed in a manner forbidden by the employer does not necessarily remove it from the scope of employment. |
|
|
Term
| scope of employment: frolic and detour |
|
Definition
| Small or minor deviations from an employer's directions fall within the scope of employment, while major deviations fall outside scope. |
|
|
Term
| Motivation to serve employer |
|
Definition
| At the time of the act, the employee must be motivated by a desire to serve purposes of employer. |
|
|
Term
|
Definition
Employer is usually not liable for the intentional torts of her employee; intentional torts are outside scope of employment.
Exception: natural incident to carrying on business, benefit running to employer, or force is authorized. |
|
|
Term
|
Definition
| An employer may ratify the unauthorized tortious acts of employee. |
|
|
