Agency

Question 1

Vicarious Liability/Respondeat Superior for Torts of Agent

Answer 1

Generally, Principal will be vicariously liable if:

1. There is a principal-agent relationship
   
   • ​​Assent: informal agreement,
   • Benefit: agent’s conduct is for benefit of principal, and
   • Control: principal has right to control/manage agent; and
2. The tort was comtted by the agent within the scope of that relationship.
   
   • conduct was “of the kind” agent hired to perform,
   • Frolic vs. Detour,
   • Intent to benefit the principal?

Intentional Torts Exception: Generally, no liability for intentional torts of agent because they are outside the scope, unless:

1. Conduct was authorized,
2. Natural from the nature of employement, or
3. Motivated by desire to serve the principal.

Question 2

Vicarious Liability/Respondeat Superior for Torts of Independent Contractor

Answer 2

Generally no vicarious liability for torts of I.C., because there is no right to control/supervise an independent contractor.

Exception: liability for inherently dangerous activities performed by an independent contractor

Factors for whether I.C.: skill? period of employment? basis of compensation? business purpose? distinct business?

Question 3

Principal’s Liability for Contracts of Agents

Answer 3

Principal liable for contracts entered into by Agent only if principal authorized the agent to enter the contract.

1. Actual Express Authority
   
   • can be oral or private; if contract w/in SoF, authorizaiton must be in writing; revoked by death (unless there is a durable PoA) or unilateral act of principal or agent; express authority is narrowly construed;
2. Actual Implied Authority
   
   • Necessity: to do all expressly authorized tasks
   • Custom: to do all tasks customarily performed by people with same title/position
   • Prior Acquiesence by principal: based on past acts
3. Apparant Authority
   
   • If principal cloaked agent with the appearance of authority, and third party reasonably relies on appearance of authority
4. Ratification (after the fact)
   
   • If principal has knowledge of the material facts of the contract, accepts its benefits, and does not alter terms of contract.

Question 4

Agent’s Liability for Contracts

Answer 4

Generally, Agent not personally liable for their authorized contracts.

Exception: If principal is partially disclosed (or undisclosed), authorized agent may be held personally liable at the election of the third party.

Question 5

Duties of Agent

Answer 5

1. Duty of Care
2. Duty to Obey
3. Duty of Loyalty
   
   1. Avoid self-dealing (benefit to determinent of principal)
   2. Usurping the principal’s opportunity
   3. Secret profit at principal’s expense without disclosure

If breached, Principal may recover losses caused by the breach (including indemnity) and disgorgement