Podcast
Questions and Answers
Which type of authority allows an agent to do what is reasonable based on the principal's implied consent?
Which type of authority allows an agent to do what is reasonable based on the principal's implied consent?
- Implied authority (correct)
- Apparent authority
- Inherent authority
- Express authority
Which of the following actions cannot be delegated by the principal according to the text?
Which of the following actions cannot be delegated by the principal according to the text?
- Engaging in business negotiations
- Voting in an election (correct)
- Hiring employees
- Signing a contract
What is the primary role of the agent in a fiduciary relationship?
What is the primary role of the agent in a fiduciary relationship?
- To monitor the activities of the principal
- To act on behalf of the principal (correct)
- To advise the principal without obligation
- To represent their own interests
What defines apparent authority in the context of agency?
What defines apparent authority in the context of agency?
What does it mean when a principal has the capacity to delegate to an agent?
What does it mean when a principal has the capacity to delegate to an agent?
What issue might arise regarding mental capacity in an agency relationship?
What issue might arise regarding mental capacity in an agency relationship?
What is the role of principals' express statements in establishing authority?
What is the role of principals' express statements in establishing authority?
When is a written contract necessary in an agency relationship?
When is a written contract necessary in an agency relationship?
What duty does an agent have regarding the principal's reasonable instructions?
What duty does an agent have regarding the principal's reasonable instructions?
In what situation is an agent not required to notify the principal?
In what situation is an agent not required to notify the principal?
What standard must an agent meet when acting on behalf of the principal?
What standard must an agent meet when acting on behalf of the principal?
What is the agent's responsibility regarding property received during agency business?
What is the agent's responsibility regarding property received during agency business?
Under which condition can an agent adjust their duty of care?
Under which condition can an agent adjust their duty of care?
What action should be taken if the principal's instructions are unclear?
What action should be taken if the principal's instructions are unclear?
Which of the following is NOT a duty of the agent to account?
Which of the following is NOT a duty of the agent to account?
What may an agent NOT do with the principal's property?
What may an agent NOT do with the principal's property?
What is required for a principal to be bound by the agent's actions?
What is required for a principal to be bound by the agent's actions?
Which of the following statements best describes the distinction between employees and independent contractors?
Which of the following statements best describes the distinction between employees and independent contractors?
What does the duty of loyalty entail for an agent?
What does the duty of loyalty entail for an agent?
What is a key aspect of clients' confidentiality according to fiduciary duties?
What is a key aspect of clients' confidentiality according to fiduciary duties?
Which of the following is NOT an example of a fiduciary duty owed by an agent to a principal?
Which of the following is NOT an example of a fiduciary duty owed by an agent to a principal?
In what situation might an agent legally represent both parties in a transaction?
In what situation might an agent legally represent both parties in a transaction?
What must an agent do if they wish to compete with the principal?
What must an agent do if they wish to compete with the principal?
Which of these actions would violate the conflict of interest principle for an agent?
Which of these actions would violate the conflict of interest principle for an agent?
What must be true for vicarious liability to apply to a principal?
What must be true for vicarious liability to apply to a principal?
Which scenario does NOT lead to vicarious liability?
Which scenario does NOT lead to vicarious liability?
In which case is a principal directly liable for an agent's conduct?
In which case is a principal directly liable for an agent's conduct?
What factor can negate vicarious liability?
What factor can negate vicarious liability?
How is principal liability established if the agent is not an employee?
How is principal liability established if the agent is not an employee?
Which condition is NOT required for the principal's liability to be established?
Which condition is NOT required for the principal's liability to be established?
What differentiates direct liability from vicarious liability for a principal?
What differentiates direct liability from vicarious liability for a principal?
What happens if one of the necessary conditions for vicarious liability is missing?
What happens if one of the necessary conditions for vicarious liability is missing?
What is the implication of a third party knowing that the agent is acting on behalf of a disclosed principal?
What is the implication of a third party knowing that the agent is acting on behalf of a disclosed principal?
Under what condition is an agent liable when dealing with a partially disclosed principal?
Under what condition is an agent liable when dealing with a partially disclosed principal?
What happens when a third party does not know the identity of an undisclosed principal?
What happens when a third party does not know the identity of an undisclosed principal?
When is an employer liable for torts committed by their agent?
When is an employer liable for torts committed by their agent?
Which situation would exempt an agent from liability in a contract with a partially disclosed principal?
Which situation would exempt an agent from liability in a contract with a partially disclosed principal?
What key factor is considered when determining the agent's liability on a contract?
What key factor is considered when determining the agent's liability on a contract?
What does it mean if a principal is partially disclosed?
What does it mean if a principal is partially disclosed?
Which of the following correctly describes the liability of an agent acting on an undisclosed principal's behalf?
Which of the following correctly describes the liability of an agent acting on an undisclosed principal's behalf?
Study Notes
Agency Fundamentals
- A written contract is not mandatory to establish an agency relationship; oral agreements are permissible.
- A fiduciary relationship involves two parties: the agent acts under the principal's control.
- Agents can include roles like sports agents and real estate agents.
Capacity of the Parties
- A principal must have the capacity to perform the act themselves to delegate authority to an agent.
- Mental capacity issues can affect the formation or continuation of the agency.
Non-Delegable Duties
- Certain actions must be performed by the principal personally, such as signing a will, voting, or serving on a jury.
Authority of Agents
- Agents must possess authority to bind principals to their actions.
- Express Authority: Clearly stated authority, either orally or in writing, e.g., negotiating contracts.
- Implied Authority: Authority inferred from the principal's actions that are reasonable for the agent to undertake.
Apparent Authority
- Third parties may reasonably believe an agent is authorized based on the principal's behavior or statements.
- The principal may create apparent authority by allowing agents to act in certain ways.
Distinction Between Employees and Independent Contractors
- The key distinction lies in the principal's control over the agent's performance.
- Employees are subject to more control compared to independent contractors.
Fiduciary Duties of Agents
- Duty of Loyalty: Agents must avoid conflicts of interest and cannot compete with the principal without consent.
- Confidentiality: Agents cannot disclose or use the principal's confidential information unless agreed otherwise, even after the relationship ends.
Duties Agents Must Fulfill
- Obey Instructions: Must follow reasonable directives from the principal but not illegal or unethical orders.
- Act with Care and Skill: Agents need to exercise a standard level of skill and diligence relevant to their tasks.
- Duty to Notify: Agents must inform the principal of important matters affecting the agency.
Duties to Account
- Agents must accurately record financial transactions and any benefits received during their agency.
- Mixing personal and agency funds is prohibited.
Liability in Contracts
- An agent's liability in contracts depends on the nature of the principal (disclosed, partially disclosed, or undisclosed).
- A principal is disclosed when the third party knows the agent is acting for them.
Tort Liability of Principals
- Principals may be liable for torts committed by agents if:
- The agent is an employee acting within the scope of their duties.
- The tort occurs during authorized times and locations and is motivated by serving the principal’s interests.
- Vicarious Liability requires all elements (agent's conduct, scope of employment) to be satisfied for the principal to be liable.
Direct Liability of Principals
- Principals can be held directly liable for agents' torts if they acted within their authority or if the principal ratifies the agent's conduct.
- Direct liability does not require an agent to be an employee or to act within the scope of employment.
Studying That Suits You
Use AI to generate personalized quizzes and flashcards to suit your learning preferences.
Related Documents
Description
This quiz covers the fundamentals of agency law, including the intricacies of oral contracts and fiduciary relationships. It discusses the roles of principals and agents, as well as the concept of capacity in delegating authority. Test your knowledge on the key elements of agency relationships.
