Podcast
Questions and Answers
Which of the following is NOT required to create an agency relationship?
Which of the following is NOT required to create an agency relationship?
- Fiduciary relationship
- A written agreement (correct)
- Mutual consent
- Control by the principal
An agent is allowed to compete with their principal if the principal is notified.
An agent is allowed to compete with their principal if the principal is notified.
False (B)
What duty does an agent violate if they use confidential information obtained during the agency for personal gain after the agency terminates?
What duty does an agent violate if they use confidential information obtained during the agency for personal gain after the agency terminates?
duty of confidentiality
The duty of an agent to act with reasonable care and skill in performing agency responsibilities is known as the duty of ________.
The duty of an agent to act with reasonable care and skill in performing agency responsibilities is known as the duty of ________.
Match the following scenarios with the type of authority the agent possesses:
Match the following scenarios with the type of authority the agent possesses:
Under what conditions can a principal be liable for tort claims made by third parties against the agent?
Under what conditions can a principal be liable for tort claims made by third parties against the agent?
A principal always has the right to terminate an agency relationship, even if doing so breaches a contract.
A principal always has the right to terminate an agency relationship, even if doing so breaches a contract.
What type of authority does an agent have when the authority is based on what the principal led a third party to believe?
What type of authority does an agent have when the authority is based on what the principal led a third party to believe?
If the existence of a principal is unknown to a third party, the principal is considered to be ________.
If the existence of a principal is unknown to a third party, the principal is considered to be ________.
Match the following types of principals with the correct description:
Match the following types of principals with the correct description:
Which of the following scenarios best describes a 'detour' in the context of agency law and scope of employment?
Which of the following scenarios best describes a 'detour' in the context of agency law and scope of employment?
A principal is generally liable for the intentional torts of an agent, regardless of whether the tort was committed within the scope of employment.
A principal is generally liable for the intentional torts of an agent, regardless of whether the tort was committed within the scope of employment.
In agency law, what is the term for a significant deviation from the scope of employment for personal reasons, relieving the principal from liability?
In agency law, what is the term for a significant deviation from the scope of employment for personal reasons, relieving the principal from liability?
Under the doctrine of ________ ________, an employer is held vicariously liable for the negligent acts of an employee committed within the scope of employment.
Under the doctrine of ________ ________, an employer is held vicariously liable for the negligent acts of an employee committed within the scope of employment.
Match the following scenarios with the appropriate liability outcome for the principal:
Match the following scenarios with the appropriate liability outcome for the principal:
Which of the following scenarios describes a situation where the principal would likely be liable for the agent's actions?
Which of the following scenarios describes a situation where the principal would likely be liable for the agent's actions?
A principal has a duty to cooperate with the agent, but this duty does not include providing the agent with an opportunity to work.
A principal has a duty to cooperate with the agent, but this duty does not include providing the agent with an opportunity to work.
What is the term for the principal's obligation to cover the agent's losses or expenses incurred while carrying out the principal's instructions?
What is the term for the principal's obligation to cover the agent's losses or expenses incurred while carrying out the principal's instructions?
If an agent breaches their duties to the principal, one potential remedy available to the principal is _________, which allows the principal to undo a contract made through the breach.
If an agent breaches their duties to the principal, one potential remedy available to the principal is _________, which allows the principal to undo a contract made through the breach.
Match the following termination types with their characteristics:
Match the following termination types with their characteristics:
Flashcards
Agency
Agency
When Person 1 gives Person 2 legal authority to act on Person 1's behalf when dealing with third parties.
Principal
Principal
A person who has someone else acting on his or her behalf.
Agent
Agent
A person who is acting for someone else.
Consent (Agency)
Consent (Agency)
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Control (Agency)
Control (Agency)
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Fiduciary Relationship
Fiduciary Relationship
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Confidentiality
Confidentiality
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Competition (Agency)
Competition (Agency)
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Secret Dealings
Secret Dealings
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Obey Instructions
Obey Instructions
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Duty of Care
Duty of Care
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Duty to Cooperate
Duty to Cooperate
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Termination
Termination
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Principal's Contract Liability
Principal's Contract Liability
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Fully Disclosed Principal
Fully Disclosed Principal
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Respondeat Superior
Respondeat Superior
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Scope of Employment
Scope of Employment
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Intentional Physical Torts
Intentional Physical Torts
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Liability for Nonphysical Torts
Liability for Nonphysical Torts
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Study Notes
- Agency Law is covered in Chapter 17.
Definitions
- Agency involves Person 1 giving Person 2 legal authority to act on their behalf when dealing with third parties.
- The principal is Person 1, who has someone else acting on their behalf.
- The agent is Person 2, who is acting for someone else.
Creating an Agency Relationship
- Consent is required, which must be mutual.
- The agent is controlled by the principal.
- A fiduciary relationship is a requirement.
What is NOT needed for an agency
- A written agreement is not needed, with an exception to equal dignities.
- A formal agreement is not needed, since no magic words are required to form relationship.
- Compensation is not needed.
Agent's Duties to the Principal
- Agents can only receive profits with permission.
- Agents have a duty to keep secrets, which is confidentiality.
- Agents cannot compete with the principal.
- An agent cannot act for more than one principal whose interests conflict unless the principal agrees.
- Agents must inform the principal if they are dealing with the agent.
- Agents must obey the principal's instructions.
- Agents have a duty of care.
- Special skills and gratuitous agents factor.
- Agents are obligated to provide information to the principal.
Remedies for Breaches
- Damages can be claimed, like in a house renting example.
- An agent must pay the principal profits received through the breach.
- Rescission allows the principal to rescind a contract made through the breach.
Principal's Duties to the Agent
- The principal has a duty to compensate the agent.
- The principal has a duty to indemnify the agent for tort claims and contract claims by third parties.
- The principal has a duty to cooperate, allowing the agent opportunity to work, and cannot unreasonably interfere.
Termination of Agency
- Either the principal or the agent can terminate the agency relationship.
- Termination can occur by term, agency at will, wrongful termination, or if either party cannot perform their duties.
Principal's Contract Liability to Third Parties
- Liability arises if the agent had express, implied, or apparent authority.
- Liability can also occur if the principal ratified the agent's acts or subagents.
Agent's Contract Liability to Third Parties
- In a fully disclosed principal scenario, the existence and identity of the principal is known.
- In an unidentified principal scenario, the principal's existence is known, but their identity is not.
- In an undisclosed principal scenario, the principal's existence is unknown.
- Unauthorized agents can create lability.
Liability for Negligent Physical Torts
- Respondeat Superior may apply.
- Consider whether the person is an employee or independent contractor
- Consider how much control the employer has over the details of the agent's work
- Principal/employer liability for torts of independent contractor may apply if there was negligent hiring or supervision.
Scope of Employment
- If an act is of the same general nature as conduct that is authorized, it is within the scope of the principal relationship.
- Consider abandonment, detour versus frolic.
Liability for Intentional Physical Torts
- Principals are generally not liable for intentional physical torts of their agents.
- Unless the employee intended to serve some purpose of the employer.
- Unless the employer was negligent in hiring or supervising the employee.
Liability for Nonphysical Torts
- Treated like contract liability.
- Principals are liable only if the employee acted with express, implied, or apparent authority.
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