Agency

Question 1

In what 3 scenarios is an agency irrevocable?

Answer 1

1. When coupled w/ interest (ex: good consigned to A by P where agent works on commission)
2. After it’s been partly exercised
3. If for fixed period then cant revoke before time expires (except w/ sufficient cause)

Question 2

When is an agency terminated by operation of law (6)?

Answer 2

1. death of P or A
2. Insanity of P or A
3. Bankruptcy of P
4. Impossibility of performance
5. Changed circumstances
6. War b/w P & A’s countries

Question 3

What are the 4 ways an Agency’s Authority can be revoked?

Answer 3

1. Expiration of time/ accomplishment of purpose
2. Death or incapacity of principal
3. Unilateral act of P or Agent
4. Operation of law

Question 4

What is the main distinction b/w a disclosed & undisclosed principal?

Answer 4

Disclosed: Existence & identity of P are known to 3rd parties
Undisclosed:
-Identity unknown, existence known (partially disclosed)
-agent acting on P behalf is unknown to 3rd party (undisclosed)

Question 5

When will a court order construtive trust be maintained due to the breach of duty of an agent?

Answer 5

Where assets being compensated are identifiable (traceable)

• Awarded to continuing, identifiable profit of a self-dealing agent
• Courts will remedy profits of self-dealing agent by rendering an account of the profits

Question 6

What are the 2 main duties of a principal?

Answer 6

1. compensation/ reimbursement
2. contractual
   - P liable for K’s of Agent

Question 7

What are the 3 main fiduciary duties of an Agent?

Answer 7

1. Reasonable care: no negligence
2. Obedience
   - duty not to accept new obligations inconsistent w/ duties owed to Principal
3. Loyalty: no self-dealing
   - cant receive benefit to P’s detriment
   - cant usurp opportunity of P
   - can’t take secret profits at P’s expense

Question 8

When can authority be granted after K was entered into? (ratification)`

Answer 8

1. when principal has knowledge of all material facts regarding K

AND

2. Principal accepts benefit of K
   * Principal not liable for K until he ratifies it

Question 9

What are the 4 types of authority of an agent?

Answer 9

1. Express
2. Implied (necessity, custom, prior dealings)
3. Apparent (agent cloaked w/ appearance of authority; 3rd party reasonably relies)
4. Inherent

Question 10

What are the 3 exceptions to the general rule that intentional torts are outside agency relationship?

Answer 10

1. specifically authorized by principal
2. natural fr type of employment
3. motivated by desire to serve principal

Question 11

What is the main distinction b/w a frolic and a detour?

Answer 11

Frolic: new & independent journey (principal not vicariously liable)

Detour: mere departure (principal still vicariously liable)

Question 12

When will a principal be vicariously liable for torts committed by his agent? (2)

Answer 12

1. principal- agent relationship exists 
AND
2. committed by agent w/in scope of employment
-job description
-tort occurred on job
-agent intended benefit to principal

Question 13

When must express authority to enter agency K be in writing?

Answer 13

1. conveys land

2. conveys interest in real estate that lasts over 1 year

Question 14

What are the 2 exceptions to the general rule that a principal is not vicariously liable for torts of independent contractors? (i.c.)

Answer 14

1. IC is engaged in ultra-hazardous act when tort occurred

2. Estoppel: i.c. holding out appearance of agency

Question 15

what 3 elements must be present for a principal- agent relationship to exist?

Answer 15

1. Assent: agreement b/w principal (w/ capacity) & agent
2. Benefit: agent’s conduct for principals benefit
3. Control: principal controls agent via power to supervise agents performance

Question 16

What are the 2 main ways a joint venture is terminated?

Answer 16

1. voluntary
   - terminate at time specified in K or
   - upon accomplishment of its purpose
2. involuntary
   - death of active member
   - court decides serious disagreement b/w members make continuation impractical

Question 17

What is the main distinction b/w a partnership & a joint venture?

Answer 17

Partnership: long-term business relationship

Joint venture: single business transaction

• both treated same for federal income tax purposes

Question 18

What are the 2 fiduciary responsibilities each joint venture owes each other?

Answer 18

1. standard of care to other members

2. duty to act in good fait in matters concerning common interests of enterprise

Question 19

What are the 3 rights of entity parties in a joint venture?

Answer 19

1. control enterprise
2. share profits
3. share losses

Question 20

What is a joint venture?

Answer 20

entity formed b/w 2 or more parties to undertake economic activity together

*could be corp, LLC, or partnership

Question 21

What 2 actions do parties in a joint venture perform?

Answer 21

1. contribute equity

2. share revenue, expenses and control

Question 22

What 3 things do parties in a joint venture share?

Answer 22

1. revenue
2. expenses
3. control