Chapter28

A principal is a person who has someone else acting for _

them

An agent is a person who acts for someone _

else

In an agency relationship, the agent agrees to perform a task under the control of the _

principal

To create an agency relationship, the parties must mutually consent that the agent will act on behalf of the _

principal

An agency relationship requires consent, control, and a _ relationship

fiduciary

A fiduciary relationship is one of _

trust

Beneficiaries place special confidence in fiduciaries, who must act in _ faith

good

To establish consent, the principal must ask and the agent must _

agree

Principals are liable for an agent’s actions because they exercise _ over the agent

control

An agency agreement does not have to be in _

writing

Under the Equal Dignities Rule, if an agent enters a contract that must be in writing, the appointment must also be _

written

An agency relationship does not require a formal _

agreement

An agency relationship does not require _

compensation

28-1b: Duties of Agents to Principals

Agents owe a _ duty to their principals

fiduciary

The duty of loyalty requires the agent to act for the principal’s _ in all matters

benefit

An agent may not receive outside benefits without the principal’s _

approval

An agent may not disclose or use _ information for personal benefit

confidential

The duty of confidentiality continues even after the agency _

ends

Agents may not _ with their principal in matters within the agency scope

compete

An agent may not act for two principals whose interests _

conflict

An agent may not secretly become a party to a transaction without the principal’s _

permission

An agent must not engage in inappropriate behavior that reflects _ on the principal

badly

An agent must obey the principal’s instructions unless they are illegal or _

unethical

An agent must act with reasonable _

care

A gratuitous agent is someone who is not _

paid

A gratuitous agent is liable only for _ negligence

gross

An agent must provide the principal with all _ they have reason to believe is important

information

Principal’s Remedies

A principal may recover _ if an agent breaches a duty

damages

A principal may recover any _ earned by an agent who violates the duty of loyalty

profits

A principal may _ a transaction if the agent violates the duty of loyalty

rescind

A principal must indemnify an agent for expenses reasonably _

incurred

A principal must indemnify an agent for tort claims if the agent was authorized and did not know they were committing a _

tort

A principal must indemnify the agent for liability to third parties when acting on the principal’s _

behalf

A principal must cooperate by giving the agent the _ to work

opportunity

A principal cannot unreasonably _ with the agent’s tasks

interfere

Either the agent or principal may _ the agency relationship at any time

terminate

A term agreement ends after the specified _

time

Achieving the agency _ also terminates the relationship

purpose

If no term exists, the relationship is called agency at _

will

Gratuitous agents always have the _ to quit anytime

right

Death, incapacity, or loss of license automatically _ the relationship

terminates

A significant change in circumstances may automatically _ the agency

end

After termination, an agent no longer has the _ to act for the principal

authority

An agency relationship increases the principal’s risk of legal _

liability

A principal is liable if an agent had _ authority

actual

Express and implied authority fall under _ authority

actual

In apparent authority, the agent is not actually _ to act

authorized

Apparent authority is based on what the _ has communicated

principal

Authority Types

Express authority is granted through words or _

conduct

Implied authority includes acts reasonably _ to accomplish the task

necessary

A principal who accepts the benefits of an unauthorized act has _

ratified

Ratification requires the principal to know all _ facts

material

Ratification is not valid if the third party _ before ratification

withdraws

A subagent is someone appointed by an _ to perform duties

agent

A principal is liable for a subagent if the agent was authorized to _

hire

An agent is not liable when the principal is fully _

disclosed

A principal is fully disclosed if the third party knows its identity and _

existence

With an unidentified principal, both agent and principal are _ liable

jointly and severally

A principal is undisclosed if the third party did not know of its _

existence

If an agent acts without authority, the agent is _

liable

Respondeat superior means “Let the _ answer

” master

An employer is liable for negligent physical torts committed within the scope of _

employment

Employees vs

Independent Contractors

Principals are usually liable for employees but not for independent _

contractors

The more control a principal has, the more likely the worker is an _

employee

An act is authorized if performed within time and _ set by the employer

place

A detour still makes the employer _ for the employee’s actions

liable

A frolic makes the employer _ liable

not

A principal is not liable for intentional physical torts unless the employee was serving the employer’s _

purpose

A principal may also be liable if negligent in hiring or _

supervising

28-2e: Nonphysical Torts

A nonphysical tort harms reputation, feelings, or the _

wallet

A principal is liable for nonphysical torts only if the employee acted with _ authority

express, implied, or apparent

Agents are always liable for their own _

torts

Principal and agent are _ liable for torts

jointly and severally