1. Manifestation of consent by principle to agent
2. that agent should act on principle's behalf
3. subject to principles control AND
4. A consents to act

*Not essential to have contract or compensation

*May prove relationship by circumstantial evidence, which shows course of action btwn parties, must show principal consented to agency relationship

1. reccomendations to agent
2. P right to first refusal of agent's business
3. inability of agent to conduct normal business transactions without P consent
4. P right of entry onto A premises
5. P critique of A business decisions
6. Common forms with P and A name
7. P finance operations within sector
1. helps show creditor or control
8. P power to discontinue A financing

1. When one contracts to acquire property ffrom a third peron and convey it to another, then an agent only if  it agreed that he is to act primarily for the benefit of other and not self
2. Factors for supplier
1. receive set price no matter what paid by him
2. own name and receives title to property he then transfers
3. indep. business in buying and selling

1. Manifestation of consent by P to A by action or inaction
2. reasonable belief by A that has authority to enter into K (facts)

1. Manifestation by P to A (action or inaction)
2. reasonable belief by A that has authority to enter into K (facts)
3. Consideration of
1. past dealings
2. special circumstances
1. dependent on prior practices or industry customs
4. *But when express repudiation, do not have authority in that area but may still have in other areas

Apparent Authority

1. Manifestation by P to T (not T agent)
2. that P holds A out as possessing or permits him to exercise under such circumstances as to preclude a denial of existence

*Also seems okay to go through T agent as long as info. gets to T

• Did P act in a way that justifes T to believe there is authority?
• Was T reasonable in thinking A had authority?

1. Power of A desrived from authority, apparent authority or estoppel
2. solely from A relationship and exists for protection of persons that deal with A
1. usually occurs when there is undisclosed P so apparent authority usually does not apply
2. or when agent not to act in certain way
3. So what is Ps liability?
1. P will still be liable for As act that T party would reasonably believe is in As authority
1. likely be liable for acts of general agent even if in violation of orders
2. agent acts for own purposes in entering into transaction, but which would otherwise usually be authorized by P
3. agent authorized to dispose of goods and departs from the authorized method of disposal

1. Act or emission (intentional or negligent) that creates appearance of authority
2. based on third party's reasonable believe
3. requires third party reliance/change in position

Ratification

1. Affirmation by a person of a prior act which did not bind him but which was done on his account
2. Must be valid affirmation
1. requires acceptance of results of act with intent to ratify and
2.  full knowledge of material consequences
3. To which the law will give effect
1. will be deied legal effect where necessary to protect third party
1. agent gets into K you did not authorize, but now you like the deal, will not go into effect if will hurt innocent 3rd party

Undisclosed/Partially Disclosed Principal

1. Agent is treated as though a party to the K and 3rd party must elect who to use
2. If the other party to transaction has notice that the aent is or may be acting for a principal but has not notice of the principal's identity, the principal for whom the agent is acting is a partially disclosed principal
1. duty of agent to fully disclose ID of partially disclosed principal, third party does not have to find out here

Tort Liability to 3rd Person:

Master-Servant

1. Exists where servant agrees to work for master and
2. to be subject to master's control or
3. right to control the physical conduct of the servant (manner in which job performed as opposed to just result)
4. master liable for servant tort's committed in scope of employment

M-S v. IK Factors

1. P control over details of work
2. employee engage in distinct occupation of business
3. occupation, locality work usually done under direction of employer w/out supervision
4. skill required in particular occupation
5. whether P supplies tools, place of work
6. length of time employed
7. metho of payment, hourly may be employee, job contactor
8. whether work part of regular business
9. intended to create master-servant
10. whether principal is in same business

IK Types

Agency Tortious L Flowchart

1. Is A an agent of P? FIRST TEST
1. If Yes, is A servant of A or IC? SECOND TEST
1. If servant, was tort commited in scope of conduct. THIRD TEST 
1. Yes, liable
2. No, exception? ALTERNATE TEST, IF SCOPE NOT MET
1. master intended consequence or conduct or
2. master was negligent or reckless
3. violation of non-delegable duty of master or
4. agent purported to act on behalf of P and there was apparent authority, or aided in conducting tort because of agency relationship
2. Ik? ALTERNATE FIRST 
1. Does the action fall within an exception? ALTERNATE SECOND
1. Principle retains control over aspect of activity in which tort occurs
2. principal employs incompetent IC
3. performance of task inherently dangerous
1. not auto L, still have to show tort
2. ultrahazardous is where there is SL
4. duty is non-delegable
2. If not within exception P not liable
3. usuallly not liable at all for non-agent independent contractor

M-S Scope of employment

1. Was the conduct of the same general nature as, or incident to, that which the servant was employed to perform?
1. consider commonality, time, place, previous act, at enterprise, master expects action, insrumentality through which harm done provided by master, extent of departure, if seriously criminal
2. Was the conduct substantially removed from time and space limits?
1. if not considered, frolic and detour (high bar)
3. Was conduct motivated at least in part by purpose to serve the master?
4. IN the alternative,
1. Was this action FOS by principal?
1. ALTERNATE EXAM argument
5. May still be in scope even if, 
1. forbidden or done in forbidden manner
1. if act servant to accomplish something that may require potential illegal/forbidden action

Apparent Agency Rule

1. Different from apparent authority
2. even in the absence of control, is the agent being hel out as controlling the franchisee
3. principal may be held VL for harm caused by lack of care or skill of apparent servant if
1. P represents that another is his servant or agent
2. causes third person to justifiably rely upon the care of skill of such apparent agency

FOS TEST: Alternate to Scope of Conduct

1. If some harm is FOS, the principal is liable even if that particular harm is unforeseeable
2. The conduct must relate to scope of employment in some way
3. Economic argument: who is the least cost avoider? some argue that government is better position to avoid this
4. Other courts focus on whether the action is anyway related to purpose to serve master: also can help make alternative, but attenuated argument

Agent's Duty of Care

1. Unless otherwise agreed, paid agent is subject to a duty to principal to act w/standard care and 
2. with the skill which is standard in the locality for the kind of work which he is employed to perform
3.  and, in addition, to exercise any special skills that he has

Agent's Duty of Loyalty

1. An agent has a duty to no acquire a material benefit from a third party
2.  in connection with transaction conducted or
3. other actions taken on behald of the principal or
4. otherwise through the agent's use of the agent's position
5. Related,
1. Agenct has a duty to not use property of the principal for the agent's own purposes or 
2. those of a third person
3. How is this violated?
1. payment from third party (kickbacks)
2. Secret profits
1. from transaction with principal without principal's knowledge
2. *even if not necessarily commiting a breach of duty to the prnicipal, L in action for restitution or any unjust enrichment by using position (like military uniform ex) to enrich self
3. Usurping business opportunities
1. failure to disclose opportunities come to agent because of role with principal is a problem, in some instances dislcosure could rid of it being a violation of fidudciary duty

 SECTION 2

Partnership

1. Association of two or more person as co-owners for profit
1. Co owner
1. shared control of business and
2. shared profits of business

Parntership Liability

1. Jointly and severally liable (incl. torts, but not always K law b/c depends on K)
2. Creditor liability
1. payment to creditors other than partners
2. owing to partners other than for capital and profits
3. Creditor can not
1. come after a partner's assets belonging to partnership 
2. but can come after a partner's individual assets to pay off partnership debt

General Partnership

1. All are general unless statutory req. for limited parntership are complied with
2. Created by law witohut need to file
1. each partner liable to outside world of all debts of partnership
3. May be created by estoppel
1. if represent to outside world they are partner
2. only where 3rd party extends credit to partnership then reliance kicks in

Limited Partnership

1. Need to file formal documentation
2. can be general, liable for debts of parntership
3. limited partners
1. not liable for debts of partnership beyond contribution

Existence of a Partnership