Agency Law

Flashcards based on lecture notes about agency law, covering topics such as agency relationships, authority, liability, and duties.

Does the characterization of the relationship by the parties determine if an agency relationship exists?

No, the characterization of the relationship by the parties is irrelevant.

Is a formal agreement always required to create an agency relationship?

No, an agency relationship requires assent, which can be a formal or informal agreement.

For an agency relationship to exist, does the agent's conduct need to primarily benefit the principal?

Yes, the conduct must primarily benefit the principal.

Does the principal need to have significant control over the agent for an agency relationship to exist?

No, the principal's right to control the agent doesn't need to be significant.

Does a universal agent have authority to perform all acts the principal can perform?

Yes, a universal agent has broad authority for all acts the principal can perform.

Does an agency relationship terminate automatically upon the death of the principal?

Yes, generally by operation of law. In some States, termination does not occur until the third-party has notice of the death, but at Common Law, agency is terminated regardless of notice.

Can a principal terminate an agent at any time, even if there is a contract?

Yes, a principal can terminate an agent at any time. However, the principal may be liable for damages if the agent is terminated prior to the expiration of a contract, unless the agent materially breached the contract.

Does a durable power of attorney prevent the termination of an agency relationship due to the incapacity of the principal or agent?

Yes, an agency relationship terminates by incapacity of the principal or agent by operation of law, except if a durable power of attorney exists.

Is a principal bound to a contract if the agent had actual authority?

Yes, a principal is bound to a contract entered into by its agent if the agent had actual authority.

Can an agent have actual authority even if the principal later shows the agent was mistaken about the extent of that authority?

Yes, an agent has actual authority when acting within their reasonable understanding of authority, even if the principal later shows the agent was mistaken.

Can implied authority arise from the principal's silence or acquiescence?

Yes, implied authority can arise if it's customary for an agent in that position, and silence or acquiescence can give rise to a reasonable belief of authority in the future.

Is a principal bound to a contract if the agent had apparent authority?

Yes, a principal is bound to a contract entered into by its agent if the agent had apparent authority.

Does apparent authority exist if a third-party reasonably believes the agent has authority, but this belief is not traceable to the principal's manifestations?

No, for apparent authority to exist, the third-party's reasonable belief that the agent has authority must be traceable from the principal’s manifestations, meaning the principal holds the agent out as having authority.

Does apparent authority continue indefinitely after an agent's actual authority is terminated?

No, apparent authority continues until the principal communicates termination to third-parties.

Can apparent authority exist when the principal is undisclosed?

No, apparent authority cannot exist with an undisclosed principal.

Can apparent authority exist when the principal is unidentified or partially disclosed?

Yes, apparent authority can exist with an unidentified or partially disclosed principal.

Is apparent authority applicable if the third-party had knowledge that the agent did not have actual authority?

No, apparent authority is not applicable if the third-party had knowledge that the agent did not have actual authority.

Does inherent agency power still exist under the Restatement (Third) of Agency?

No, the concept of Inherent Agency Power was eliminated in the Restatement (Third) of Agency.

Can a principal ratify a contract entered into by an agent without authority?

Yes, a principal can ratify a contract entered into without authority if the principal has knowledge of all material facts or contract terms and assents to them through words or conduct.

Under the Restatement (Third) of Agency, can an undisclosed principal ratify a contract?

Yes, under Restatement (Third) of Agency, an undisclosed principal can ratify.

Is an agent generally liable for contracts entered into on behalf of a principal if the principal was fully disclosed and the agent had actual or apparent authority?

No, generally, an agent has no liability if they fully disclose the principal to a third-party and have actual or apparent authority.

Can an agent seek indemnification from a principal if the agent is held liable for authorized conduct?

Yes, an agent may seek indemnification from a principal if the agent is liable and their conduct was authorized.

Is the primary focus for determining if someone is an employee or independent contractor the principal's right to control the manner and method of the job?

Yes, the primary focus is whether the principal had the right to control the manner and method in which the job was performed.

Is an employer liable for an employee's negligent acts if the employee was acting within the scope of employment?

Yes, under the Respondeat Superior Doctrine, an employer is liable for an employee’s negligent acts if the employee was acting within the scope of the employment.

Are intentional torts generally considered within the scope of employment under the Respondeat Superior doctrine?

No, intentional torts are generally outside the scope of employment. Exceptions include when the act was specifically authorized by the employer, driven by a desire to serve the employer, or resulted from naturally occurring friction from the type of employment.

Can a principal be held liable for an agent's torts even if the Respondeat Superior doctrine is inapplicable?

Yes, a principal/employer can be liable for an agent’s acts outside the Respondeat Superior doctrine in specific situations, such as if the principal intended the conduct/consequences, was negligent or reckless in selecting, training, supervising, or controlling the agent, if it is a non-delegable duty, or if the agent had apparent authority that led to the tort and the third-party reasonably relied on such authority.

Is an employer generally liable for an independent contractor's torts?

No, generally, an employer/principal has no liability for an independent contractor’s torts.

Can a principal be liable for an independent contractor's torts if the activity is inherently dangerous?

Yes, this is one of the exceptions to the general rule of no liability for independent contractors' torts.

Does an agent owe a duty of loyalty to the principal?

Yes, an agent owes a duty of loyalty to act solely and loyally for the principal’s benefit.

Must an agent obey all directions from the principal, even if they are unreasonable?

No, an agent has a duty to obey all reasonable directions of the principal.