Chapter 30 - liability of principles and agents

Missrepresentation

Fraud of deceit, or innocent missrepresentation, the principal is liable for these made in the scope of employment. The third party can rescind the contract and recover any consideration or affirm the contract and recover damages.

Agent's duty of loyalty

If breaches duty of loyalty, the agent is liable to the principal. Self dealing - cannot buy agent's own home usurping an opportunity - cannot take an offer unless rejected by principal competing w principal - agent cannot compete on deals with the principal Misuse of confidential information - no disclosing trade secrets etc. Dual agency - cannot meet duty of loyalty with two principals of competing interests

Agent ecveeding scope of authority

Implied warrant of authorty is when an agent enters into a contract on behalf of another party. The principal is not liable if it exceeds scope of authorty and agent is liable because of this.

Liability for an independent contractor's torts

In general they are not liable for the acts of independent contractors because they do not control the way they get the job done. Only if they might be a huge company, dangerous activity, or negligent in hiring the contractor might they be liable.

Liability of intentional torts

Outside of scope of business a principal is not liable for torts of agent. principal is liable under doctrine of vicarious liability for intertial tors committed in the scope of employment.

Independent contractors

Persons and businesses who are not employees that are hired to do a job. i.e. doctors, lawyers, etc.

Tort liability to third parties

Principal and agent are each personally liable for their own tortious conduct. Principal liable for torts of agent if they act in scope of their authority. Agent only liable for torts of principal if they directly or indirectily participates in or aids and abets the principals conduct

Negligence

Principals are liable for negligent conduct by agents acting in their scope of employment. based on RESPONDENT SUPERIOR - let the master answer. i.e. principal benefits from act of agent so they should be held accountable

Liability for an independent contractor's contracts

Principals can allow independent contractors to enter contracts and are bound to the contracts rightfully entered. principal is liable for these contracts. if independent contractor entered into a contract with a third party on behalf of the principal without express or implied authority from the principal to do so, the principal is NOT liable.

Fully disclosed agency

Results if a third party entering into a contract knows 1. thea agent is acting as an agent for the principal, and the actual identity of the principal. Only principal is liable to third party unless they guarantee the principal will perform. In this kind of relationship, signature of agent on behalf of principal must indicate they are agent.

Factors determining independent contractor status

The main factor in determining status is the degree of control. whether worker is engaged in a distinct occupation or an independently established business The length of time the agent has been employed by principal Amount of time an agent works for the principal whether the principal supplies the tools and equipment used in work Method of payment, by time or job the degree of skill necessary whether the worker hires employees to assist him or her whether the employee has the right to control the manner and mean of accomplishing the desired result

What factors do courts rely on to determine whether an agent's conduct occurred within the scope of his or her employment

act requested or authorized by principal act the agent was employed to perform act occur within time period od employment authorized by principal act occur substantially within the location of employment authorized by employer was agent advancing on the agent's purpose when the act occurred

Frolic and detour

agent does something duringg the course of his employment to further his own interest rather than the principals. Principals are generally relieved from negligent acts that occurred in this, but if it is minor deviation, still liable.

The motivation test

if the employees motivation in coming the tort is to promote the principals business, the principal is liable for any unjust caused by the tort. However if motivation was personal, principal is not liable even if during business hours.

Dual purpose mission

principal asks the agent to do an errand on the way home from work. both are liable because of the dual purpose of the mission.

The coming and going rule

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

The work-related test

some jurisdictions have rejected the motivation test as to narrow. If an agent commits an intentional tort within a work related time or space the principal is liable for any injusreies caused by torts. motivation is immaterial.

Undisclosed agency

the third party is unaware of the existence of an agency or the principals identity . Both agent and principal are liable because agent becomes a principal. if third party fails to perform, the third party can recover against the agent who can sue for indemnification.

Partially disclosed agency

the third party knows the agent is acting for a principal, but does not know who the principal is either by instructing or by forgetting to tell the identity. both agent and principal are liable because the third party is relying on agent. If agent is forced to pay contract, can sue principal for indemnification.

Contract liability to third parties

third parties can enforce contracts on principal, and in certain cases the agent too depending on how its classified 1.fully disclosed 2. partially disclosed 3. undisclosed