Chapter 14

Respondeat Superior

"let the master answer," the rule of imposing vicarious liability upon an innocent principal is known as

Duty to account

An agent must be able to account for funds and property that the principal has given possession of or entrusted him with

Negligent Hiring

An employer may be held liable for negligence in hiring and for putting in a position of trust or responsibility a person who could be expected to possibly cause problems

agency relationship

An employment for the purpose of representation in establishing relations between a principal and third parties

power of attorney

a legal document that authorizes a person or company to act as an agent for a principal

general agent

a person authorized to execute all transactions connected with a certain business; principal may limit extent to only a portion of the business

Independent Contractor

a person who contracts with another to do something for him but who is not controlled by the other nor subject to the others right to control with respect to his physical conduct in the performance of the undertaking

express ratification

a principles clear signal to be bound to the otherwise unauthorized agreement

ratification

acceptance of responsibilities by the principal to be bound to the contract

agency by estoppel

agency is created by the actions of the principal; similar to implied ratification

agent

agrees to act for, in place of, another person or company

reasonable care

an agent is required to perform responsibilities with the degree of care that a reasonable person would excersise under the circumstances

duty of obedience and performance

an agent must perform instructions provided by the principal and would be liable to the principal for related losses if instructions are ignored

special agent

an agent with authority to represent the principal only for specific transactions usually for a limited time

apparent authority

arises when the principal creates an appearance of authority in a n agent that leads a third party to conclude reasonably that the agent has authority to act for the principal

actual authority(real authority)

given by principal to the agent, and confers the power and the right to change the principals legal status on the agent

principal

gives the agent authority to represent

Employee Handbooks

manuals to explain company policies, benefits, and procedures

Disclosed Principal

one whose identity is known by the third party at the time a contract is entered into with an agent

Undisclosed Principal

one whose identity is unknown by the third party; the third party has no knowledge that the agent is acting for another when a contract is made

express authority

oral or written instructions given by the principal to an agent

universal agent

someone designated to do all acts that can be legally granted to an agent; general power of attorney to do all business transactions on behalf of the principal

Duty to inform

the legal requirement that an agent has to inform a principal of any matters related to the agency that can affect its success

implied ratification

the principal behaves as if he has the intent of ratifying the unauthorized agreement

duty to cooperate

the principal by perform responsibilities defined in the agreement forming the agency

duty to reimburse

the principal must pay the agent for authorized payments the agent makes to third parties on behalf of the principal

duty to compensate

the principal must pay the agent unless the agent agrees to work for free

duty of loyalty

this requires an agent to place the principals interests before the agents personal interests or those of another third party

duty to indemnify

to pay for damages or to insure the agent against losses suffered while undertaking authorized transactions(example is the principal directing the agent to sell something that isnt his, and then getting sued.)

Vicarious Liability

under this rule, a principal or employer can be liable for the authorized or unauthorized intentional or negligent torts of agents and employees who were acting within the scope of employment

gratuitous agent

when a person volunteers with no expectation of being paid for her services; no pay does not change the legal consequences of the relationship

subagent

when a principal authorizes an agent to delegate authority to other agents; they work for the agent but owe duties to both the agent and the principal

agency coupled with an interest

when an agent pays for the right to have authority for a business

implied authority

when expressed authority is granted so is this... gives authority to carry out whatever is reasonable to agency's purpose

fiduciary

when the agent occupies a position of trust, honesty, and confidence for the principal; agents duty to the principal

agency by operation of law

when the courts impose an agency relationship due to an emergency; the agent is given the authority to act beyond what has been granted by the principal due to an emergency. Must be compensated