Term
| When is principal liable for torts committed by agent? |
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Definition
1. Principal/Agent relationship exists
2. Agent was acting within the scope of that relationship |
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Term
What are the 3 requirements for forming a principal/agent relationship?
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Definition
Assent
(agreement to create relationship, P must have capacity)
Benefit to Principal
Control
(right to control manner and means- supervise) |
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Term
| When is principal liable for acts of a sub-agent? |
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Definition
A.B.C. (assent, benefit, control)
Agent must have been authorized to hire the sub-agent |
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Term
| When is principal liable for torts of a borrowed agent? |
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Definition
A.B.C. Test
(look at whether or not the primary right to control has been transferred from the lender principal to the lendee principal) |
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Term
| When is principal liable for torts of Independent Contractor? |
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Definition
NEVER.
Unless:
Hired to do inherently dangerous activity,
Estoppel (appearance of P-A relationship and third party reliance) |
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Term
| Factors used to differentiate between employee and independent contractor |
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Definition
MAINLY: right to control manner and method of performance
can be evidenced by:
-method of payment
-period of employment
-tools
-separate business |
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Term
| How to tell if Agent was acting within scope of relationship for tort |
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Definition
-was conduct of the kind agent was hired to perform?
(within job description)
-did tort occur on the job?
-did agent intend to benefit principal? |
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Term
| How to tell if tort occured "on the job" |
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Definition
DETOUR or FROLIC?
Frolic: indepdent journey (major deviation from directions) --> outside scope
Detour: near departure from assigned task (minor deviation) --> within scope
*coming BACK to work
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Term
| Are principals liable for intentional torts of agents? |
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Definition
NO!
Unless:
authorized by Principal
natural indient to carrying out directions
motivated by desire to serve Principal |
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Term
| When is principal liable for contracts made by agent? |
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Definition
| if the principal AUTHORIZED the agent to enter the contract |
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Term
| Types of authority to make contract on behalf of Principal |
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Definition
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Term
| Express authority can be ORAL, except: |
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Definition
if contract is for interest in land for more than one year
(must be in writing) |
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Term
| When is express authority revoked? |
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Definition
1. unilateral act of either the principal or agent
OR
2. death of the principal |
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Term
| Express authority terminates upon the incapacitation of the principal unless: |
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Definition
Principal gave agent a durable power of attorney
(durable survives incapacitation, BUT not death) |
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Term
| What are the ways an agent can infer implied autority? |
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Definition
NECESSITY
(necessary to accomplish expressly authorized task)
CUSTOM
(customarily performed by persons with agents title UNLESS told not to)
PRIOR DEALINGS
(agent reasonably believes it is authorized based on prior acquiescence of P) |
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Term
| TEST FOR APPARENT AUTHORITY |
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Definition
1. Principal held out agent as having authority (cloakced agent with appearance of authority)
2. Third party reasonably relies on appearance of authority |
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Term
| Principal can RATIFY contract absent actual authority if: |
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Definition
Principal has knowledge of all material facts
Principal accepts its benefits
(Note: ratification cannot alter terms of contract, must be ratified as is) |
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Term
| Agent is not liable on authorized contracts UNLESS: |
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Definition
| Principal is only partly disclosed OR undisclosed |
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Term
| What duties does an agent owe to Principal? |
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Definition
REASONABLE CARE
OBEDIENCE
LOYALTY
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Term
| As part of the duty of loyalty an agent owes to a principle, an agent cannot engage in: |
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Definition
Self-dealing (cannot receive a benefit to the detriment of principal)
usurping principal's opportunity
Secret profits (making a profit at principal's expense without disclosure) |
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Term
| What remedies does a principal have for an agent who has breached the duty of loyalty? |
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Definition
| Principal can recover its losses and demand disgorgement of profits |
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