Agency Principles Who is liable in a K Claim brought by 3rd party? o Is the principle liable for acts of the agent?

? (Contract Case) Is the person an agent of the principle? Agency is: o Fiduciary duty o The manifestation of consent by the principle that the agent act on his behalf and under his control o Consent by the agent to act on behalf of the principle Principle is a person for whom the act is being preformed Agent is the person who is performing the act Did the agent have authority to perform the act? Agent must have authority from principle in order for the principle to be liable o 2 types of authority: Actual authoritycreated by manifestations from the principle to the agent Expressdirect command that the agent actually do the work. Impliedrecognizes that the agent has the authority to do what is reasonably necessary to get the job done. (no need to spell out every detail) Apparent authoritycreated by a manifestation by the principle to the third party Requirements: o The manifestation must be attributable to P o Must get to the third party o Must lead 3rd party to reasonably conclude that A is an agent for P o NOTEdetrimental reliance is not required. Did the agent act within the scope of his authority? If Yes, P is liable because A can bind P to the extent that A acts within the scope of his authority If No, the A could be liable to P for breach of K for failing to perform a service in accordance with the parties agreement. o Is P liable to A? Did A act within the scope of actual authority? Yes, P must indemnify A regardless whether there was expressed or implied authority o Is A liable to 3rd party? Was the P disclosed? Disclosed PA not liable unless otherwise agreed Partially disclosed PA is liable unless otherwise agreed o Partially disclosed P3rd party knows that the A is acting on behalf of a principle but does not know the principles identity. Undisclosed PAgent is liable, however, if acting within his authority P still liable. NOTEP must be disclosed at the time that the K is entered into. o Is A liable to P? Did A act with actual authority? No, did A act with apparent authority? o Yes, A is liable to indemnify P Who is liable for a Tort claim brought by a 3rd party? o Is P liable? (start with agency analysis) Is this a master-servant relationship? (respondeat superior) Masterthe P who employs and controls A in performing the service Servantthe A who is employed and controlled by P in performing the service YESWas A performing within the scope of his employment? o As conduct must be the kind that is authorized or incidental to the conduct authorized by P

Conduct is within the scope of employment if: The kind that A is employed to perform Occurs substantially w/in the authorized time and space limits Done with the purpose to serve the master, AND If A intentionally uses force, force is expected by the allowed by the P/master NOTEIntentional Torts are generally not w/in the scope of the employment unless the circumstances indicate otherwise. Detoursignificant deviation, not w/in the scope of employment Frolicminor deviation, w/in the scope of employment o YES, P is liable for the Torts of A o NO, P is not liable for the torts of A, UNLESS: P intended the conduct or consequences OR P was negligent or reckless OR The conduct violated a non delegable duty of the P OR The Tort was accomplished by actual or apparent authority Is A an Independent Contractor(IC)? GRVicarious liability does not apply to ICs, unless IC is engaged in inherently dangerous activity o ICsomeone who contracts w/ another to do something but is not controlled by that person Agent ICP is NOT liable in tort, but IS Liable in K for the acts or omissions of AIC Non-Agent ICP is not liable in tort OR K for the acts or omissions of a NAIC o Is A liable? GRA may be liable for torts committed, although he acted on behalf of the principle What if there is an attorney-client relationship? o The attorney is the A of the client (P) P controls A subject to 2 limitations: A does not have to follow Ps instructions if they interfere w/ the accomplishment of Ps goals AND A may decline to engage in wrong doing What if there is a franchisor-franchisee relationship? o Did the franchisor have an agency disclaimer? Yes, may avoid liability, however this is not determinative o Is the franchisor liable? EstoppelIf there is detrimental reliance franchisor will be liable AgencyIf there is an agency relationship franchisor will be liable Actual Agency(right of control test) Franchisor has the right to exercise control over the daily operations of the franchisee an agency relationship exists. Apparent AgencyIn order to have apparent agency there must be: o a representation of central uniformity AND o justifiable reliance on the franchisor name o o NOTEto avoid apparent agency the franchisor must take away the thing that created reliance