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Agency (Contracts (3rd Party v. Principal (To hold a principal liable to a…
Agency
Contracts
3rd Party v. Principal
To hold a principal liable to a 3rd party for the actions of an agent, the agent must have the authority to enter the agreement
Actual Authority - Manifestation of the principal to the agent that the agent acts for the benefit of the principal in a particular way and that the principal agrees to be bound by the agent's actions.
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Implied - Authority to accomplish the P's express request; or things the agent believes the P wishes him to do based on the reasonable understandings of P's express request.
Apparent Authority - The agent is cloaked with authority.
- 3rd Party reasonably believes the agent has the authority to act on behalf of P and
- that belief is is based on teh P's representations made to the party.
Ratification - Principal grants retroactive authority for his agent's earlier unauthorized actions
- Ratified act must be one that the principal could have authorized at the time of the act.
- Once ratified, an act has the same effect as if it were originally done with authority.
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Agent v. Principal
Contractual duties owed to agent
- Compensate per the agency contract
- Indemnify for reasonably incurred legal liabilities
- Reimburse for reasonably incurred expenses
- Cooperate (P may not interfere in agent's performance and P must affirmatively aid where reasonably required to do so.).
3rd Party v. Agent
Disclosed v Undisclosed Principal
- Fully disclosed Principal, Agent is not liable in K
- Undisclosed Principal, agent is personally liable in K
- Partially Disclosed Principal, agent is personally liable in K. When 3d party learns of true principal, it can go after either the P or the A, but not both.
Breach of warranty of authority - Agent acts beyond her authority on behalf of the P. Agent is personally liable.
Torts
3rd Party v. Principal
Agent is employee
Respondeat Superior - Doctrine imposes vicarious liability upon a principal for the torts his agent commits in the scope of employment
Factors:
- engages in tasks assigned by employer or conduct subject to employer's control.
- Serves employer's purposes
-Employer is not liable if the employee substantially deviates from the authorized route (frolic)
- Employee can return to scope of the employment after frolic.
- Employer is still liable for slight deviations (detour)
-Employer's liab. is in addition to to agent's liab.
- Employer and employee are joinly and severally liable
- Strict liab. - no defenses
Agent is Ind. K
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Exceptions:
- Inherently dangerous activities
- Nondelegable Duty
- Loaned Agent
- Negligent selection of Contractor
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Principal v. Agent
Agents are liable for breach of their duties to the principal:
- Duty of Care
- Duty of Obedience
- Duty of Loyalty
- Duty to accoutn
Duty of Loyalty = no self-dealing, may not usurp a business opportunity belonging to the principal, duty to not compete, no dual agency
Definition -
Creating an Agency Relationship - One person, a principal, assents to another person, an agent, to act on the principal's behalf. The agent must also assent.
Independent Contractor or Employee?
- An employee has no right to control the details of the performance of an independent contractor.
- The employer has the right to control the details of the conduct of its employee as to the result and the means to the result.
Factors:
- Distinct occupation or business
- Work customarily done under a principal's supervision
- Skill required in the agent's occupation
- Who supplies the tools and place of performance
- Length of time the agent is engaged by the principal
- Whether the agent is paid by the job or the hour
- Intent of the parties
- Whether the principal is in business