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Agency - Coggle Diagram
Agency
Liable for an agent's
TORT
?
Principal's Liability
Respondeat Superior
Principal may be
vicariously liable
for a tort committed by an agent acting within the
scope of his employment.
2) Agent must commit tort while acting in
scope of employment
Performing work assigned by employer
Engaging in course of conduct subject to the employer's control
If employee
acts independently
of any intent to serve any purpose of the employer, the employer may escape liability.
Even if employee acts carelessly, makes a mistake, or violates a generally applicable law (speed limit)...not necessarily acting outside the scope of employment when the employee believes that compliance would jeopardize the employee’s timely completion of his assigned task.
Folic
When an employee’s personal errand involves a significant deviation from the path that otherwise would be taken for the purposes of performing work, the errand is a frolic
1) Agent must be a
servant
(employee)
Independent contractor
If Agent is an independent contractor– principal :red_cross:liable
UNLESS
Nondelegable duty
Negligent selection of independent contractor
Work they’re performing = inherently dangerous activity
Servant/Employee = Principal controls/has right to control the manner & means of the agent's performance of work
Principal's Liability
Agent's Liability
Disclosed or Undisclosed Principal?
When an agent enters into a contract on the principal’s behalf & binds the principal to the contract, the
agent might also become a party
to (and liable on) the contract.
Whether the agent becomes a party depends on the terms of the contract and the
degree to which the agent discloses to the third party
the existence and identity of the
principal
.
Partially Disclosed
3rd party has notice of the principal’s
existence
but not the principal’s identity.
Agent who enters into a contract on behalf of a partially disclosed principal becomes a party to the contract.
Undisclosed
3rd party has no notice of the principal’s existence
Agent who enters into a contract on behalf of an undisclosed principal becomes a party to the contract.
Disclosed
3rd party has notice of both the
existence
and
identity
of the principal.
Agent who enters into a contract on behalf of a disclosed principal does not become a party to the contract.
Election of Remedies Doctrine
Once the 3rd party discovers the existence of the principal, they're required to choose to hold liable either the principal or the agent liable– NOT both
Liable on a
CONTRACT
that the agent made?
A principal is subject to liability on a contract that the agent enters into on the principal’s behalf if the
agent has the power to bind the principal
to the contract.
Agent has the
power to bind
the principal when agent has...
Difference between Implied authority & Apparent authority
Implied
= results when the principal’s words or actions
cause an agent
to reasonably believe in the agent’s authority to act.
Apparent
= results when the principal
causes a third party
to reasonably believe that the agent has authority to act.
Actual Authority
The
principal makes a manifestation
that causes the agent to believe that the
agent is doing what the principal wants
(subjective), and the
agent's belief must be reasonable
(objective)
Implied actual authority
CAPE
Implied Authority due to
E
mergency
Agents have implied authority to take all reasonably necessary measures in cases of emergency, in the absence of the principal and/or specific instructions to act.
Implied by
A
cquiescence
Support's agents perceived authority to act in the future
Affirms
agent's belief that her actions are furthering the principal's objectives
The principal
fails to object
to the unauthorized actions of the agent
When principal
accepts agents acts as they occur
Implied Authority by
P
osition
A principal may manifest assent to the actions of his agent by placing the agent in a position that customarily has certain authority, such as vice president or treasurer.
C
ustomary Implied Authority
Agent has implied authority to act within accepted business customs or general trade usage within an industry. The agent must be aware of the normal business customs or usage before she acts
Express actual authority
Specific instructions
Clear/direct language
Oral/Written words
Ratification
Principal grants
retroactive
authority for agent's earlier unauthorized actions.
Apparent Authority
Agent is cloaked with authority
3rd party: (1) reasonably believes the agent has authority to act on behalf of the principal and (2) the belief is based on the principal's representations to the 3rd party