1. Assent

2. Benefit

3. Control

An agreement to create an agency/principal relationship between a principal who has capacity and her agent (agent's capacity is irrelevant)

Must be voluntary and consensual.

No consideration required.

ABC's must be met: 

1. Assent: agent must have been authorized to hire sub-agent to do the work

2. Benefit: sub-agent must have been hired for principal's benefit

3. Control: principal must have power to supervise sub-agent's performance (unlikely)

ABC's must be met. 

Unlikely that control factor will be satisfied for a borrowed agent - usually it's the lender, not the borrower, who has the right to supervise borrowed agent's performance.

Factors:

1. IC has a separate business/occupation

2. IC is being paid for limited period of engagement

3. IC is supplying own tools and facilities for the job

4. Parties' understanding was that IC would be IC rather than agent

5. Local customs re: supervision of work

1. IC's acts are inherently dangerous - ultrahazardous exception

2. Estoppel: P creates appearance of agent/principal relationship and 3rd party relies on it

3. P delegates non-delegable duties to IC - e.g., duty to make premises safe to invitees

4. P knowingly selects an incompetent IC

1. An agent/principal relationship was created

2. The tort was committed within the scope of the agent/principal relationship

1. Was the conduct the kind A was hired to perform?

2. Did A intend to benefit P in the course of the conduct?

If A had 2 objectives, it will be w/in scope of r/s if benefit to P was a substantial objective of her conduct.

1. Invitations to unauthorized passengers while A is performing w/in scope of A/P r/s

2. A using substantially different instrumentalities from the ones P authorized to complete the task

3. Commuting

General rule: not liable - 3 exceptions:

1. Intentional tort was authorized by P

2. Intentional tort was natural incident of carrying out P's directions

3. Intentional tort was motivated by desire to serve P

When P has knowledge of all material facts.

Ratification renders P vicariously liable for A's tort.

When A was authorized by P to enter into a contract.

4 kinds of authority: actual express, actual implied, apparent, and ratified

P's words expressly authorizing A to enter into K on P's behalf.

General words granting authority are narrowly construed.

No writing requirement UNLESS power involves K  re: an interest in land for more than a year.

1. Unilateral act of either A or P

2. Death of P

3. P's incapacity

Exception: express authority NOT invoked by P's incapacity if P gave A a durable POA

4. Lapse of specified or reasonable time or happening of specified event

5. Change in circumstances (e.g., destruction of subject of r/s, insolvency of A or P)

Authority that P gives A through conduct or circumstance.

1. Necessity: tasks necessary to complete an expressly authorized task

2. Custom: tasks customarily performed by persons w/ A's title or position, unless specifically directed otherwise

3. Prior dealings: tasks A reasonably believes she is authorized to do based on P's prior acquiescence

CMR: implied authority includes emergency measures, power to settle litigation, power to delegate ministerial tasks, power to delegate when customary or necessary, acceptance and payment of goods when A has authority to purchase

Two-part test:

1. P cloaked A w/ appearance of authority

2. 3rd party reasonably relied on appearance of authority

P did something to hold A out as someone w/ authority to act on P's behalf

1. Secret limiting instruction: P holds A out as having authority, but secretly limits A's authority, and A exceeds it - P is liable

2. Lingering authority: P terminates A's authority but A continues to act as if she has it - P is liable until 3rd parties receive actual or constructive notice of A's termination

P ratifies K after A enters into it - 3 requirements

1. P has knowledge of all material facts

2. P accepts the benefits of the K

3. P does not modify the terms of the K in accepting

P (and not A) is liable for all authorized contracts.

A (and not P) is liable for all unauthorized contracts.

A who acts on behalf of P who is either partially disclosed (3rd party knows A is acting on behalf of someone, but not who) or undisclosed (3rd party doesn't know A is acting on anyone's behalf)

In these cases, 3rd party can elect who to hold liable - A, P, or both

NY: undisclosed Ps are NOT liable on negotiable instruments

1. Duty of reasonable care - A has to inform P what is going on

2. Duty to obey reasonable instructions (but no duty to obey illegal instructions)

3. Duty of loyalty

1. Self-dealing: A can't receive a benefit to P's detriment

2. Can't usurp P's opportunities

3. Can't make secret profits: can't profit from transaction arising out of agent/principal r/s without informing P of the profit

1. Reasonable compensation

2. Duties imposed by their K

3. Reimbursement