Authorization
�agent is working for the principal, but commits an act that the principal has not authorized
�An act is within the scope of employment
Abandonment
principal is liable for actions of employee that occur while employee is at work, but not for actions that occur after employee has abandoned the principal's business
Intentional Torts
�principal is not liable for the intentional physical torts of the employee unless
-employee intended to serve some purpose of the employer
-employer was negligent in hiring or supervising this employee
Nonphysical Torts
One that harms only reputation, feelings or wallet
Agent's Liability for Torts
Agents are always liable for their own torts
Principal
In an agency relationship, the person for whom an agent is acting
Agent
In an agency relationship, the person who is acting on behalf of a principal
To create an agency relationship, there must be:
-a principal
-an agent
-who mutually consent that the agent will act on behalf of the principal
-be subject to the principal's control
-thereby creating a fiduciary relationship
Consent in an agency relationship
principal must ask the agent to do something, and the agent must agree
Control in an agency relationship
principals are liable for acts of their agents because they exercise control over that person
Fiduciary Relationship
trustee acts for the benefit of the beneficiary, always puts interests of the beneficiary before his own
Elements not required for an agency relationship:
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Outside benefits
agent may not receive profits unless principal knows and approves
Confidential information
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Duty to Obey Instructions
agent must obey her principal's instructions, unless the principal directs her to behave illegally or unethically
Duty of Care
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Gratuitous agent
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A principal has what 3 potential remedies when an agent breaches her duty?
1. Damages
2. Profits
3. Rescission
Duty to Indemnify
as a general rule the principal must reimburse the agent for any expenses she has reasonably incurred
Terminating an agency relationship
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Wrongful termination
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Loss of qualification
if principal or agent is unable to obtain or keep any licenses necessary to perform duties under the agreement, the agreement ends
Bankruptcy
bankruptcy of agent or principal terminates relationship only if it affects their ability to perform
Death or incapacity of the principal or agent
agency relationship terminates upon the death or incapacity of either the principal or agent
Liability to third parties
agency relationship dramatically increases the risk of legal liability to third parties
What are the 3 types of authority?
1. express
2. implied
3. apparent (principal is liable for agent's actions even though the agent was not authorized)
Ratification
if a person accepts benefits of an unauthorized transaction or fails to repudiate it, he is as bound by the act as if he had originally authorized it
Subagent
someone appointed by an agent to perform agent's duties
Intermediary agent
someone who hires subagents for the principal
Fully disclosed principal
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Unidentified principal
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Undisclosed Principal
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Unauthorized agent
if the agent has no authority, the principal is not liable to the third party, but the agent is
Respondeat superior
an employer is liable for a physical tort committed by an employee acting w/in the scope of employment and a nonphysical tort of an employee acting w/ authority
Negligent hiring
principal is liable for the physical torts of an independent contractor if the principal has been negligent in hiring or supervising her