Ch. 11

partially disclosed agency

An agency that occurs if: -The agent discloses his or her agency status but does not reveal the principal's identity, and -The third party does not know the principal's identity from another source •Both the principal and the agent are liable to the third party if the principal fails to perform the contract. ex: real estate transactions

undisclosed agency

An agency that occurs when the third party is unaware of either: -The existence of an agency, or -The principal's identity •Both the principal and the agent are liable to the third party if the principal fails to perform the contract.

dual purpose mission

An errand or other act that principal requests of an agent while the agent is on his or her own personal business In this situation most courts impose liability on both parties, the agent and the principal ex- employee leaves the office to go to lunch and manager asks them to purchase lunch for them and during lunch the employee commits a tort that injuries a third party

motivation test

If the agent's motivation in committing an intentional tort is to promote the principal's business, the principal is liable for injuries caused by the tort. If agent's motivation is personal, principal is not liable.

express agency

Most agency relationships occurs when a principal and an agent expressly agree to enter into an agency agreement with each other agent receives actual authority to act on behalf of the principal when the principal gives actual consent to the agent power of attorney empowers the agent to sign legal documents -general: agent has broad authority to bind the principal in a variety of matters -specific: agent has limited authority and is allowed to act on specified matters

work related test

Only applied in some jurisdictions If agent commits intentional tort within a work-related time or space, the principal is liable. Agent's motivation immaterial.

coming and going rule

Principal is generally not liable for injuries caused by its agents and employees while they are on their way to or from work.

negligence

Principals are liable for negligent conduct of agents acting within the scope of their employment. Liability is based on the common law doctrine respondent superior

Smith, 67, grants an ordinary power of attorney to Percy to handle a list of financial transactions on Smith's behalf. This power will terminate on

Smith's death or incapacity

tort liability to third parties

The principal and the agent are each personally liable for their own tortious conduct. The principal is liable for the tortious conduct of an agent who is acting within the scope of his or her authority. The agent only is liable for the tortious conduct of the principal if they directly or indirectly participates in or aids and abets the principal's conduct.

intentional torts

The principal is not liable for intentional torts of agents and employees that are committed outside the principal's scope of business. Two tests to determine the scope of employment boundaries: -Motivation Test -Work-Related Test

respondent superior

This doctrine rests on the principle that if anyone (principal) expects to derive certain benefits from acting through others (agent), that the person should also bear the liability for injuries caused to the third party by the negligent conduct of an agent who is acting within the scope of their employment.

fully disclosed agency

When the third party entering into the contract knows: -That the agent is acting as an agent for a principal, and -The actual identity of the principal •The principal is liable to the third party. •The agent is not liable.

Jack LaBane hires Kelly to act as his agent to purchase Juice and & Fitness, Inc. LaBane tells Kelly to reveal that she is buying the company on behalf of a third party and to tell Juice's seller who that third party is. LaBane is

a disclosed principal

Traders, Inc. hires Bennett to act as its agent to purchase Choco Trade company. Traders tells Bennett to reveal only that he is buying the firm on behalf of a third party, without telling Choco's seller who that third party is. Traders, Inc. is

a partially disclosed principal

Renunciation by agent

agent also has the power to renounce (resign) the agency authority by giving notice to the principal

duty of performance; agent

agent use reasonable diligence and skill in performing the work required under the agency agreement agent owes a fiduciary duty not to act adversely to the interests of the principal. common breaches: Self-Dealing -Agents are generally prohibited from undisclosed self-dealing with the principal. Usurping an Opportunity -An agent cannot usurp an opportunity that belongs to the principal. Competing with the Principal -Agents are prohibited from competing with the principal. Misuse of Confidential Information -The agent is under a legal duty not to disclose or misuse confidential information during or after course of the agency. Dual Agency -An agent cannot meet a duty of loyalty to two parties with conflicting interests.

implied agency

agent's authority is determined from the facts and circumstances surrounding the conduct of the parties occurs when a principal and an agent do not expressly create an agency

irrevocable agency

an agency coupled with an interest special type of agency relationship irrevocable by the principal; does not terminate upon death only when the obligations are fulfilled

Hog and Feed Company hires Bart to work on Hog's shipping dock, accepting deliveries, approving shipments out, check the loading of hogs, and dealing with other companies' drivers. With respect to Hog, Bart is most likely

an agent

principal independent contractor

businesses employ parties to act as non-employees perform certain tasks on their behalf independent contractor is a party who contracts with a principal to perform a service without being under the principal's control—that is, not an employee For example, real estate agents, business consultants, doctors, and attorneys serve as independent contractor

if independent contractor determine

degree of control whether the party is engaged in a distinct occupation or profession whether the employer supplied any tools or equipment the duration of the contractual relationship method of payment (hourly or on completion of the job), degree of skill required

agents duties

duty of loyalty: agent must act solely for the benefit of the principal and avoid any conflicts of interest, cannot have dual agency without parties notice; ex: real estate agent representing seller and buyer duty of notification: duty to notify principal of any relevant information duty of accountability: duty to maintain accurate accounting of all transactions undertaken on the principals behalf

principals duties

duty to compensate an agent for services provided within a mutually agreeable time duty to indemnify the agent for any losses the agent suffers because of the principal. Such duty arises when the agent is held liable for the principal's misconduct -protects identity duty to cooperate with and assist the agent in the performance of the agent's duties and accomplishments of the agency duty to provide a safe working environment that is free from any dangerous conditions

Subs, Inc. hires Brown to manage one of Sub's seven shops. Subs agrees to pay Brown a salary, plus commission. Subs outlines the standards that should be followed, the goals that should be attained, and the methods that should be used. Brown is most likely Sub's

employee

employer employee

exists when a corporation hires an employee, other than a key employee employee is not an agent unless he or she is specifically empowered to enter into contracts on the principal employer's behalf

agency

fiduciary relationship resulting from the manifestation of consent by one person, called the agent, to another, called the principal, to act on behalf of the principal and subject their control

Bret is a sales representative for Grander, Inc. Green is injured through Bret's negligence. Grander may be liable to Green if Bret's conduct occurred

in the course and scope of Bret's employment

termination by operation of law

occurrence of certain events will automatically terminate an agency relationship death of principal or agent insanity of principal or agent bankruptcy of principal impossibility of performance; destruction, lose license, change of law changes in circumstances; new info that affects principals interest war between principal and agents country

agency by ratification

occurs when a person acts on behalf of another without authority and the other person accepts (ratifies) their actions A person misrepresents himself or herself as another's agent when in fact he or she is not, and The purported principal ratifies (accepts) the unauthorized act

Principle-Agent Relationship

principal hires agent to act on behalf for a specific purpose For example, a corporation hires someone as its chief executive officer, where this individual makes major decisions that can bind the corporation

revocation of the authority

principal may cancel (revoke) an agent's authority at any time

A principal is not liable to a third party for any contract made by the agent acting outside the scope of his or her authority.

true

principal independent contractor relationship

A principal can authorize an independent contractor to enter into contracts. Principals are bound by the authorized contracts of their independent contractors crucial factor in determining whether a person is an employee or an independent contractor is the degree of control that the principal has over that person

liability for independent contractors

A principal is generally not liable for the tortious conduct of independent contractors it hires. Independent contractors are personally liable for their own torts. The rationale behind this rule is that principals do not control the means by which the results are accomplished. A principal is, however, liable for the tortious conduct of an independent contractor involving: -Inherently dangerous activities. -The negligent selection of the independent contractor Crucial factor is degree of control

Misrepresentation

A principal is liable for the intentional and innocent misrepresentations made by an agent within the scope of employment. Intentional misrepresentation occurs when an agent makes statements that they know is untrue. Innocent misrepresentation occurs when an agent negligently makes a misrepresentation to a third party.

contract liability to third parties

A principal who authorizes an agent to enter into a contract with a third party is liable on the contract. The third party can enforce the contract and recover damages from the principal .

apparent agency

Agency that arises when a principal creates the appearance of an agency that in actuality does not exist the principal is estopped from denying the agency relationship

frolic and detour

Agents sometimes do things during the course of their employment to further their own interests, rather than the principal's. ex-delivery driver using a company vehicle during employment (making deliveries) decided to go to his house for lunch; accident occurred that resulted in injuries to a third party. The issue here is who is liable for the third party's injuries