Agency Mini Review. This is an agency question in a K setting. 1.

First determine if the Agent(A) had Actual Authority from the Principal(P) (must have capacity) at the time the K was entered into a. Actual authority can be; i. Express Given expressly by (P) to (A). (in writing if SoF applies, consideration not required.) ii. Implied Through the (P) actions towards the (A). b. Actual Authority can be terminated by: i. Specified Time/Event or reasonable time ii. Change of Circumstances iii. Agent acquiring adverse interest. iv. When (A) says so v. When (P) says so (unless coupled with interest, which would make it irrevocable) vi. By death/incapacity/bankruptcy (unless coupled with an interest.) c. Actual Authority can be delegated by (A) to sub agent if (P) consents (either expressly or implied) 2. If no actual authority look for a substitute for actual authority. a. Apparent Authority (P) leads third party (T) to mistaken believe (A) has authority. i. Reasonable belief must be created by (P) not just (A) ii. Can linger longer than actual authority. (to destroy convey end of authority to T) b. Ratification (P) can expressly affirm the K, accept the benefit, or suing (T) on it. i. Must know all material facts, accept entire transaction, and have capacity currently and at time K was formed (Ratification is RETROACTIVE) ii. Must protect intervening rights of a BFP. c. Adoption Adoption is like Ratification but is not retroactive, in addition Agent continues to be liable unless novation occurs (usually dealing with promoter and unformed corp.) 3. Relationship of Parties a. (P)&(A) i. (A) is fiduciary: Owes Duty of Loyalty, Duty of Care, and Duty of Obedience. ii. (P) must compensate (if applicable), reimburse expenses & indemnify (A) for losses. iii. Remedies (wide range including constructive trust) b. (P)&(T) (Assuming actually authority or substitute. ) i. (P) always liable to (T) ii. (T) almost always Liable to (P) 1. Except where undisclosed (P) and (A) has special skills. c. (A)&(T) i. Generally no Liability.

This is an agency Question in a Tort Setting 1. Was a Tort committed by a Servant(S) acting within the scope of employment? a. Yes, Then Master(M) and (S) are jointly and severally liable to the injured party. b. (S) is determined, as versus independent contractor by looking at; i. If (M) had a RIGHT TO CONTROL!!! ii. If (M) supplied (S) tools/workspace. iii. If (S) job was part of (M)s regular business. iv. If employment was long term. v. If payment was in regular intervals or by the job. 2. (M) is liable for (S)s tort only if (S) was acting within scope of employment. a. Usual Tasks are within the scope. i. Minor deviations, called a DETOUR, are within the scope. ii. Substantial deviations, called a FROLIC, are not within the scope. b. For intentional Torts, (S)s intent is generally not imputed to (M). 3. If liable then (M) and (S) are jointly and severally liable to T. (T is entitled to only one satisfaction) 4. (M) is liable for a borrowed (S) if I had right to control the borrowed (S) when the accident occurred. 5. (M) is directly liable for its own negligence if (M) failed to train, supervise or check backgrounds of (S).