Podcast
Questions and Answers
What is necessary for a principal to be bound by an agent's actions?
What is necessary for a principal to be bound by an agent's actions?
- The agent must provide written documentation of actions.
- The agent must have a signed contract.
- The agent must have some type of authority. (correct)
- The agent must work for the principal.
What is a key difference between employees and independent contractors?
What is a key difference between employees and independent contractors?
- Employees are subject to more control from the principal. (correct)
- Independent contractors must complete tasks by a set schedule.
- Employees cannot choose how to complete their tasks.
- Independent contractors have less responsibility than employees.
Which duty does an agent owe regarding conflicts of interest?
Which duty does an agent owe regarding conflicts of interest?
- Agents must always prioritize their own interests.
- Agents can compete with the principal in all situations.
- Agents can have conflicts of interest as long as they disclose them.
- Agents must avoid conflicts of interest unless the principal consents. (correct)
What defines confidential information for an agent?
What defines confidential information for an agent?
Under what condition can an agent disclose confidential information?
Under what condition can an agent disclose confidential information?
What should an agent avoid doing when conducting the principal's business?
What should an agent avoid doing when conducting the principal's business?
Which scenario represents a breach of duty by the agent?
Which scenario represents a breach of duty by the agent?
What is one of the primary fiduciary duties of an agent?
What is one of the primary fiduciary duties of an agent?
What defines a fiduciary relationship between a principal and an agent?
What defines a fiduciary relationship between a principal and an agent?
Which statement is true regarding the capacity of a principal to delegate to an agent?
Which statement is true regarding the capacity of a principal to delegate to an agent?
Which of the following is an example of a non-delegable obligation of a principal?
Which of the following is an example of a non-delegable obligation of a principal?
What is implied authority in an agency relationship?
What is implied authority in an agency relationship?
Which type of authority is created through the principal's explicit statements?
Which type of authority is created through the principal's explicit statements?
Which of the following best describes apparent authority in an agency relationship?
Which of the following best describes apparent authority in an agency relationship?
When can an agent typically act on behalf of the principal?
When can an agent typically act on behalf of the principal?
What does the nature of agency typically include?
What does the nature of agency typically include?
Under what condition can an agency be terminated by operation of law?
Under what condition can an agency be terminated by operation of law?
What type of authority does an agent have when the principal explicitly communicates authorization?
What type of authority does an agent have when the principal explicitly communicates authorization?
What happens to an agent's authority once the agency is terminated?
What happens to an agent's authority once the agency is terminated?
Which of the following is a condition that ends apparent authority?
Which of the following is a condition that ends apparent authority?
Which of the following actions cannot be assumed as part of an agent's implied authority?
Which of the following actions cannot be assumed as part of an agent's implied authority?
How can a principal bind themselves to an agent's unauthorized contract?
How can a principal bind themselves to an agent's unauthorized contract?
What is apparent authority primarily based on?
What is apparent authority primarily based on?
If the principal dies, which type of authority ends automatically?
If the principal dies, which type of authority ends automatically?
In which situation is an agent most likely to be liable on an authorized contract?
In which situation is an agent most likely to be liable on an authorized contract?
What conditions must be met for a principal to be liable for torts committed by their agent?
What conditions must be met for a principal to be liable for torts committed by their agent?
What does it mean if a principal is described as a 'partially disclosed principal'?
What does it mean if a principal is described as a 'partially disclosed principal'?
Under what circumstance would a third party not be able to hold an agent liable?
Under what circumstance would a third party not be able to hold an agent liable?
What is a key factor that determines if an agent is liable on a contract made on behalf of the principal?
What is a key factor that determines if an agent is liable on a contract made on behalf of the principal?
What condition would lead to a third party believing that the agent is the principal?
What condition would lead to a third party believing that the agent is the principal?
What does it indicate if an agent is recognized as having the authority to act for the principal?
What does it indicate if an agent is recognized as having the authority to act for the principal?
When is an agent not liable for transactions when acting on behalf of a principal?
When is an agent not liable for transactions when acting on behalf of a principal?
What must be true for a principal to be held vicariously liable for an agent's tortious conduct?
What must be true for a principal to be held vicariously liable for an agent's tortious conduct?
What is a key difference between vicarious liability and direct liability?
What is a key difference between vicarious liability and direct liability?
In the context of vicarious liability, what does it mean for an agent's actions to be "motivated at least in part to serve the employer"?
In the context of vicarious liability, what does it mean for an agent's actions to be "motivated at least in part to serve the employer"?
If any one of the criteria for vicarious liability is missing, what happens?
If any one of the criteria for vicarious liability is missing, what happens?
In what scenario would a principal be liable for an agent's actions if the agent was not acting within the scope of employment?
In what scenario would a principal be liable for an agent's actions if the agent was not acting within the scope of employment?
What does it mean for the principal to be negligent regarding the agent?
What does it mean for the principal to be negligent regarding the agent?
For which of the following actions is the principal not liable under vicarious liability?
For which of the following actions is the principal not liable under vicarious liability?
Which condition does not need to be met for a principal to be held liable for an agent's tortious conduct?
Which condition does not need to be met for a principal to be held liable for an agent's tortious conduct?
Study Notes
Agency Overview
- Agency allows one party (agent) to act on behalf of another (principal).
- Oral contracts can be valid in establishing an agency relationship.
- A fiduciary relationship arises, where the agent acts under the principal's control.
Capacity to Enter Agency Relationships
- Individuals must have the capacity to act as principals and agents.
- Mental capacity issues can impact the formation or continuation of the agency.
Non-Delegable Obligations
- Certain acts must be performed by the principal personally, including signing wills, voting, or jury duty.
Authority Types
- An agent must possess authority to bind the principal:
- Express Authority: Clearly stated by the principal (written or oral).
- Implied Authority: Acts necessary to carry on the business or reasonable actions inferred from the principal’s conduct.
- Apparent Authority: A third party reasonably believes the agent has authority based on the principal's behavior.
Principal-Agent Relationship
- Distinctions exist between employees and independent contractors based on the principal's control:
- Employees are subject to more control over performance.
- Independent contractors retain freedom in how they complete tasks.
Fiduciary Duties of the Agent
- Duty of Loyalty:
- Agents must avoid conflicts of interest.
- Agents cannot compete with the principal directly.
- Dual representation requires consent from both parties.
- Confidentiality:
- Agents are obligated to keep valuable information confidential unless agreed otherwise.
Termination of Agency
- Agency can terminate by operation of law, often due to principal's death or incapacity.
- Upon termination, authority (express, implied, apparent) usually ends, although apparent authority may linger until the third party is notified.
Principal's Contract Liability
- Principals are liable for contracts made by agents with express, implied, or apparent authority.
- Ratification by the principal can bind them to unauthorized contracts.
Types of Principals in Contract Liability
- Disclosed Principal: Third party knows agent is acting for a principal.
- Partially Disclosed Principal: Third party knows of the agent but not the principal; agent remains liable unless otherwise agreed.
- Undisclosed Principal: Third party is unaware of the principal; agent is liable as the principal.
Tort Liability of the Principal
- A principal may be liable for torts committed by employees if:
- The tort occurs during employment or within an authorized time/context.
- The employee’s actions are related to serving the employer’s interests.
- Liability depends on multiple factors being present, including the nature and timing of the agent’s actions.
Types of Liability
- Vicarious Liability: Principal is liable for torts of agents performed within their employment scope.
- Direct Liability: Principal can be found at fault if conducting their own negligence or mismanagement in directing the agent.
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Description
This quiz explores the nuances of agency relationships, focusing on the principles of fiduciary duties and the capacity of agents and principals. Test your knowledge on oral contracts and the roles within various agent-principal dynamics. Ideal for those studying business law.
