Chapter 19 : Agency Relationships

Gratuitous agent

A ___ cannot be liable for breach of contract because there is no contract. Only subject to tort liability

Agency of estoppel

A principal causes a third person to believe that another person is the principal's agent, and the third person acts to his or her detriment in reasonable reliance on that belief.

Cooperation

A principal has a duty to __ with the agent and to assist the agent in performing his or her duties. EX: When a principal grants an agent exclusive territory, the principal cannot compete with the agent or appoint or allow another agent to compete.

Misrepresentation

A principal is exposed to tort liability whenever a third person sustains a loss due to the agent's _____. Decide whether the agent was liable if it was in the scope of the agency. < principal always liable

Duties

A principal owes an agent(s) ____ that include: Compensation, reimbursement and indemnification, cooperation, and safe working conditions.

Through

A principal who acts ___ an agent may be liable for harm resulting from the principal's own negligence and recklessness. EX: gives improper instructions, authorizes use of improper materials, establishes improper rules that results in agent committing a tort.

Person or property

A principal who authorizes an agent to commit a TORT may be liable to ____ injured thereby, because the act is considered to be the principal's

Equal dignity rule

A rule requiring that an agent's authority be in writing if the contract to be made on behalf of the principal must be in writing.

e-agent

A semiautonomous computer program that is capable of executing specific tasks.

clear to the agent

Actual authority (express or implied) arises from what the principles makes ____

emergency situations

Agency by operation by law may also occur in _____. The agent may take steps beyond the scope of her or his authority if the principal cannot be reached and it would cause a lot of loss.

formal agreement

Agency relationship in the absence of a ____ such as family relationships. EX: when one spouse purchases certain basic necessaries and charges them to the other spouse's account. A spouse is liable for payment because it is a legal duty to help supply.

Voluntary consent and agreement

Agency relationships normally are consensual. They come about about by _____ between the parties.

Agent

An ___ owes the principal five duties - Performance Notification Loyalty Obedience Accounting

Agency relationship

An ____ can arise in four ways: Agreement of the parties Ratification Estoppel Operation of law

unenforceable

An agency relationship created for a purpose that is illegal or contrary to public policy is ____

Implied authority

An agent has the ____ to do what is reasonably necessary to carry out express authority and accomplish the objectives of the agency.

Duty of notification

An agent is required to notify the principal of all matters that come to her or his attention concerning the subject matter of the agency.

Authority

An agent's ____ can be either actual (express or implied) or apparent.

physical harm

An employer is NOT liable for ____ caused to a third person by the negligent act of an independent contractor. Bc the employer does not have the right to control the details of an IC performance.

Copyright Act

Any copyrighted work created by an employee within the scope of her or his employment at the request of th employer is a "work for hire". The employer owns the copyright to the work

third party to believe

Apparent authority, arises from what the principal causes a _____

scope of authority

Authorized acts: If an agent acts within the _______, normally the principal is obligated to perform the contract regardless of whether the principal was disclosed, partially disclosed, or undisclosed.

Strict

Courts make an exception to non liability claims for employers against IC when involving unusually hazardous activities. Here ____ liability is imposed and an employer cannot be shielded from liability bc it's an IC.

Taxes

Employers are required to pay certain ___, such as social security and unemployment taxes, but not for independent contractors

Detour

If a servant merely took a ___ from his master's business, the master will be responsible. EX: while on delivery he decides to stop at a store three blocks away for personal matters. Negligently runs into a car = employer liable

Liable

If an agent has no authority but nevertheless contracts with a third party, the principal cannot be held liable on the contract. The agent is ____

Uncertainty

If the agent expresses to the third party ____ as to the extent of her or his authority - the agent is not personally liable

Ratification

If the principal approves or affirms that contract by word or by action, an agency relationship is created by ___. Involves a question of intent, and intent can be expressed by either words or conduct

Disclosed

If the principal is ___, the agent ahas no contractual liability for the nonperformance of the principal or the third party

Frolic

If the servant was on a "____ of his own" and not in any way "on his master's business," the master will not be liable. EX: Delivery guy goes to pick up friends and get cocktails and negligently runs into a car = employer NOT liable.

Travel time

If travel is part of a person's position, as it is for a traveling salesperson, then _____ is normally considered within the scope of employment.

degree of control

In determining if the person working is an IC or employee it all depends on the important factor the ___ the business exercises over the worker.

Agency at will

In which either party may terminate at any time - the principal who wishes to terminate must give the agent a reasonable notice.

Control

Independent contractors are not employees because those who hire them have no ___ over the details of their work performance.

Vicarious liability

Or indirect liability because the principal - employer is being held liable for torts committed by an agent - employee

unauthorized

Ratification occurs when the principal affirms, or accepts responsibility for, an agent's _____ act

Employer-employee

Statutes governing social security, withholding taxes, workers' compensation, unemployment compensation, workplace safety, and discrimination apply ONLY if an ___ exists. DO NOT apply to independent contractors.

Remedies

The ___ available to the non breaching party arise out of contract and tort law. Include monetary damages, termination of the agency relationship, an injunction, and required accountings.

Principal-agent

The ____ relationship is fiduciary - based on trust. Each party owes the other the duty to act with the utmost good faith.

Renunciation

The act of termination is called ___ if done by the agent.

Revocation

The act of termination is called ___ if done by the principal.

Principal

The acts or declarations of an agent in and of themselves do not create an agency of estoppel. It is the deeds or statements of the ____ that create an agency by estoppel.

Duty of loyalty

The agent has the duty to act solely for the benefit of his or her principal and not in the interest of the agent or a third party. Also any information gained through the agency relationship is CONFIDENTIAL.

Accounting

The agent must keep and make available to the principal an account of all property and funds received and paid out on principals behalf. Duty to maintain separate accounts.

Performance

The agent's agreement to use reasonable diligence and skill in performing the work. Degree of skill used that one possesses

Scope of agency

The key to determining whether a principal may be liable for the torts of an agent under the doctrine of respondeat superior is whether the torts are committed within the ____

Respondeat superior

The principal - employer is liable for any harm caused to a third party by an agent - employee in the course or scope of employment

Reimbursement

The principal has the duty to indemnify an agent for liabilities incurred because of authorized and lawful acts and transactions.

Reasonably

The third person must prove that he or she ___ believed that an agency relationship existed. An ordinary person familiar with business practice would have been justified in concluding that the agent had authority.

Intentional torts

Under the doctrine of respndeat superior, the employer can be liable for ____ that an employee commits within the course and scope of employment.

Fraudulent acts

When a principal has placed an agent in a position of apparent authority the principal may also be liable for the agent's _____

Compensation

When a principal requests certain services from an agent, the agent reasonably expects payment.

Undisclosed

When a principal's identity is ___ and the agent is forced to pay the third party, the agent is entitled to be compensated by the principal.

Obedience

When acting on behalf of the principal, an agent has a duty to follow all lawful and clearly stated instructions of the principal. When principal cannot be reached agent may fulfill by acting in good faith and a reasonable person.

Operation of law

When an agency terminates by ____ there is no duty to notify third persons. 1. Death / Insanity 2. Impossibility > EX: a change in the law 3. Changed circumstances 4. Bankruptcy 5. War

emergency power

When an unforeseen event demands action by the agent to protect or preserve the property and rights of the principal, but the agent is unable to communicate with the principal, the agent has _______

bound

When ratification occurs, the principal is ____ to the agent's act, ad the act is treated as if it had been authorized by the principal from the outset.

Independent contractor

Who is not controlled by the other nor subject to the other's right to control with respect to his [or her] physical conduct in the performance of the undertaking

Agency law

based on common law

Employment law

based on statutory law Employee to employee relationship

Indemnify

compensate for loss, damage, or injury; reimburse; repay

Fiduciary

is at the heart of agency law Refers to a person having a duty created by his or her undertaking to at primarily for another's benefit in matters connected with the undertaking. Trust and confidence

Expressed authority

is authority declared in clear, direct, and definite terms. can be given ONLY in writing

Strict liability

the doctrine of respondent superior is similar to the theory of _____ in that liability is imposed regardless of fault for reasons of public policy.

Safe working conditions

the principal has a duty to ensure ___ and to warn the agent if the principal is aware of any potential danger.

Exclusive agency

when a principal grants an agent an exclusive territory

Apparent Authority

when the principal, by either word or action, causes a third party reasonably to believe that the agent has authority to act, even though the agent has no express or implied authority