Ch. 30 - Liability of Principals, Agents, and Independent Contractors.

Fully Disclosed Agency

Agency i which a contracting party knows: Agent is acting for a principal. Identity of principal.

Undisclosed Agency

Agency in which a contracting third party does not know either the existence of the agency or the principal's identity. Principal and agent both liable if principal fails to perform

Partially Disclosed Agency

Agency in which a contracting third party knows that the agent is acting for a principal but does not know the identity of the principal. Both principal and agent are liable to the third party if the principal fails to perform the contract

Agent's tortious conduct

Agent is liable for tortious conduct of principal only if agent directly or indirectly, aids and abets the principal's conduct.

Implied warranty of authority.

Agent who enters into a contract on behalf of another party warrants that he or she has the authority to do so.

Principal is liable for misrepresentiatioins made by

Agent within scope of employment

Principal can authorize

An independent contractor to enter into contracts.

Liability for intentional torts includes

Assult, battery, false imprisonment, and other intentional conduct that causes injury to another person

Agency law imposes

Contract liability on principals and agents'

Motivation test

Determines whehter an agent's motivation in committing an international tort is to promote the principal's business

Work-related test

Determines whether an agent committed an international tort within a work-related time or space

Respondeat Superious

Employer is liable for the tortious conduct of It's employees or agents while they re acting within the scope of the employer's authority

Agent's Duty of Loyalty

Fiduciary duty owed by an agent, not to act adversely to the interests of the principal.

Agent can also be held liable

In certain circumstances

Principals who authorizes an agent into a contract with third party

Is liable on the contract

Sources of Tort Liability

Negligence Intentional Torts Misrepresentation

Independent Contractor

Person who contracts iwht another to do something for him who is not controlled by the other nor subject to the other's right to control with respect to his physical conduct in the performance of the undertaking. Principal is not liable for the torts of It's independent contractors.

Coming and going rule

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

Tortious conduct

Principal is liable for tortious conduct of agent acting within scope of authority

Vicarious Liability

Prinicpal is liable for an agent's tortious conduct because of the employment contract between the principal and the agent

Liability for negligence is based on

Respondeat superior Vicarious Liability

Common types of breaches of loyalty

Self Dealing. Usurping an opportunity. Competing with principal. Misuse of confidential information. Dual agency.

Ratification of contract

Situation in which a principal accepts an agent's unauthorized contract. Principal of liable, only if he or she ratifies.

Frolic and detour

Situation in which an agent does something during the course of his or her employment to further his or her own interests rather than the principal's

Dual-purpose mission

Situation that occurs when a principal requests an employee or agent to run an errand or do another act for the principal while the agent is on his or her own personal business

Principal is not liable on the contract with an independent contractor if

The independent contractor enters a contract with out the principal's authority.

Principle is not liable for

The torts of It's independent contractors.

Factors Determining Independent Contractor Status

Whether the worker is engaged in a district occupation or an independently established business. Length of time the agent has been employed by the principal. Amount of time that the agent works for the principal. Whether the principal supplies there tools and equipment used in the work. Method of Payment, whether by time or by the job. Degree of skill necessary Whether the worker hires employees to assist him or her. Whether employer has the right to control the manner or means of accomplishing the desired result.

Independent contractors are liable

for their own torts.