You are on page 1of 6


The Types Of Law
A. Constitutions
1. Laws that determine the fundamental political principles of a government; use separation of powers to establish
Congress (make laws), pres (execute/enforce laws), and judiciary (interpret laws)
2. Used by both state and federal governments; recognizes states power to make laws in certain areas.
3. Have various functions
a. Set up the structure of a government by creating branches and subdivisions and laying out the powers
provided to each branch and subdivision
b. Prevent other units of government from taking certain actions or passing certain laws (I.e., the Bill of
Rights to the United States Constitution prohibits government action that restricts specific individual
rights such as freedom of speech, freedom of association, etc.)
B. Statutes
1. Laws created by elected representatives in Congress or a statute legislature; uniform acts = model statutes made
by private lawyers/scholars and becomes law after legislature enacts them
2. Some federal statutes include the Clean Water Act, the Federal First Offenders Act, and the Patriot Act
C. Common Law: judge-made law/case law
1. If a case is not governed by a statute or other type of law, judges will apply case law or common law; does not
prevail for a precedent properly distinguished (when court see diff. b/t present and past case)
2. Stare decisis: the practice where judges follow the decisions of other judges (I.e., when deciding a case
involving race discrimination, a judge might look to the U.S. Supreme Court case, Brown v. Board of Education, as
a basis for its decision)
3. Restatements- can be adopted as common law by states; stimulates changes in common law by suggesting new
rules that courts later decide to follow.
a. Collections of common law (and sometimes statutes) that cover various areas of law
b. Because they are created by the American Law Institute, and not judges, they are not binding on courts
but do provide persuasive authority
D. Equity
1. A body of law focusing on fairness rather than rigid rules
2. Equitable remedies include:were developed because remedies in common law were too few
a. Injunction: a court order forbidding or requiring a party to act (most important)
b. Specific performance: an order requiring a party to perform as promised in a contract
c. Reformation: a court rewriting of contract terms to reflect parties intentions
d. Rescission: a cancellation of a contract, returning parties to the position they were in before their
E. Administrative Regulations and Decisions
1. Laws created by administrative agencies such as the Environmental Protection Agency and U.S. Immigration and
Customs Enforcement
2. Congress gives the agencies the power to make laws through a delegation (or grant) of power; generally created
by statute specifying areas can make law and scope of powers
3. Agencies make two types of law:
a. Administrative regulations: laws published in one source such as the Code of Federal Regulations;
differ from statutes cause enacted by body not elected
b. Agency decisions: statements from internal courtlike structures
1. Agreements between the United States and foreign governments, such as the North American Free Trade
Agreement or NAFTA
2. Considered the supreme law of the land if made by the president and approved by two-thirds of the U.S. Senate
G. Ordinances: enactments by counties (i.e., Ventura County, Los Angeles County, Orange County) and municipalities, such
as zoning ordinances
H. Executive Orders: laws issued by the President of the United States or a state governor; results from legislative
Priority Rules: when different types of laws conflict, courts apply the following rules
A. Federal supremacy: federal laws (Treaties, the U.S. Constitution, Federal Statutes) trump conflicting state and federal
B. The federal constitution trumps other federal laws and state constitutions trump other state laws
C. When a treaty conflicts with a federal statute, the law enacted last will prevail
D. Statutes trump administrative decisions and regulations
E. Statutes and any laws derived from them trump inconsistent judge-made law
Classifications of Law
A. Criminal law (government prosecutes someone for committing a crime I.e., California v. OJ Simpson) and civil law
(obligations owed by private parties to one another I.e., the lawsuit filed by the Brown and Goldman families against OJ
Simpson for wrongful death); Criminal penalties (prison/fines) differ from civil remedies ($ damages or equitable relief);
same behavior will sometimes violate both and liabilities can be claim at same time
B. Substantive law (rights and duties of individuals in society) and procedural law (controls the behavior of courts and other
government bodies); state homicide statute is substantive, criminal, and public law
C. Public law (concerns government powers and relations with private parties, such as criminal and admin) and private law
(concerns rights and duties by parties owed to one another, such as contract, property, agency)
Jurisprudence: legal philosophies
A. Legal positivism
1. Defines law as the command of a recognized political authority
2. Views legal validity as separate from moral validity; have to obey valid laws, just or not
B. Natural law: contends that some higher law or set of universal moral rules binds all human beings; unjust positive law are
not valid under this view; judges take this law view while interp. statutes
C. American Legal Realism- believe in the use of discretionary powers
1. Defines the law as the behavior of public officials as they deal with matters before the legal system; law in the
books is less important than law in action
2. Feels that modern judges are social engineers who should weigh all relevant values and consider social science
findings when deciding a case
D. Sociological Jurisprudence law is a process of social ordering refelcting societys dominant interests and values; seems to
resemble natural law cause definition include social values
1. A general labeling unit for several different approaches that look at law within the context of society; no
distinctive sociological definition of law
2. Most schools are concerned only with the fact the moral values influence the law, but do not focus on the merit of
moral values
E. Other Schools of Jurisprudence
1. Law and Economics Movement: examines legal rules by looking at economic theory and analysis; hs led to
antitrust laws
2. Critical Legal Studies: usually regards law as the result of political calculations and the biases of lawmakers
The Functions of Law instrumentalist attitude is its willingness to adapt law to further the social good.
A. Peacekeeping
B. Checking government power and promoting personal freedom
C. Facilitating planning
D. Promoting economic growth
E. Promoting social justice
Protecting the environment
Legal Reasoning legal rule is the major premis, the facts are minor, and the result is the product of combining the two
A. Case Law Reasoning: cases are moot if theres no longer a dispute b/t the parties; used by courts when they make and
apply common law
1. Stare decisis: Courts look to prior cases (known as precedents) for legal rules
2. If a prior case is not similar enough to the case the judge is deciding, the judge can distinguish the prior case and
then create a new law to govern the current case
B. Statutory Interpretation: there is deliberate ambguity in the language of statutes
1. If the statutes words have a clear, common, accepted meaning, courts will often apply the statute according to
the usual or plain meaning of the words
2. Courts will refuse to follow the plain meaning, however, if legislative history (such as congressional hearings)
reveal a contradictory intention or purpose; helps to promote stabilty and certainty
3. Courts occasionally interpret statutes to reflect general public purposes
4. Courts sometimes defer to prior cases and administrative decisions to interpret a statute or fill in details on a
case-to-case basis
5. Courts may apply maxims (general rules of thumb) to interpret statutes
C. Limits on Court Power Courts cannot make or interpret law in the absence of a case
1. Respect of established precedents (prior cases) and the will of the legislature
2. Fear of being overruled by a higher court
3. Politics/Fear of being removed from office
4. Requirement that parties present a real dispute, i.e., courts generally do not issue advisory opinions (decisions
regarding abstract legal questions unrelated to an actual dispute)
5. Parties must have standing to sue: a direct, tangible, and substantial stake in the result of the case
6. However, state and federal declaratory judgment statutes allow parties to determine their rights and duties
even though their dispute has not yet caused harm and required legal relief
A. Definition: A courts power to hear a case and issue a decision binding on the parties
B. Two Types
1. Subject-matter jurisdiction
a. Power to decide the type of dispute
b. Different types include:
Constitutional issues
Statutory issues
A case concerning parties from different states
2. In personam and In rem jurisdiction
a. In Personam jurisdiction
Power over the particular parties
Based on the residence, location, or activities of the defendant
b. In Rem jurisdiction: based on the location of the property that is the subject of the suit
Court Systems: the United States has 52 court systems
A. Federal Courts = 1 system
1. District Courts
a. Lowest federal court
b. Many bases of jurisdiction, including
a) Suit is between citizens of different states
b) Amount in controversy exceeds $75,000
Federal question
a) Case arises under the Constitution, laws, or treaties of the U.S.
b) No amount in controversy requirement
2. Specialized federal courts
a. Court of Federal Claims
b. Court of International Trade
c. Bankruptcy Courts
d. Tax Court
3. Federal Courts of Appeals

a. Intermediate federal courts

b. Hear appeals from decisions of the federal district courts
c. Do not find facts
d. Review only legal questions reached by lower federal courts
4. Supreme Court
a. Highest court in the U.S.
b. Mainly an appellate court
c. Mostly handles appeals from the federal courts of appeals and the highest state courts
d. Under the writ of certiorari, the Court has discretion over whether to hear a particular case
B. State Courts (including a system for the District of Columbia) = 51 systems
1. Courts of Limited Jurisdiction
a. Hear minor criminal cases and civil disputes involving small amounts of money or specialized matters
b. Examples
Traffic Courts
Probate Courts
Small Claims Courts
2. Trial Courts
a. Find relevant facts in a particular case
b. Identify the appropriate rules of law
c. Combine both of the above to reach a decision
d. Fact-finding function may be handled by a judge or jury
3. Appellate Courts
a. Hear appeals from the trial courts
b. Generally, only decide legal questions
c. Do not have a jury, and their judges do not find the facts
d. Also may hear appeals from state administrative decisions
Civil Procedure: a set of legal rules governing the conduct of a trial court case between private parties
A. To win a civil case, the plaintiff must prove each element of his claim by a preponderance of the evidence
B. Stages and Motions in Civil Cases
1. Summons: notifies the Defendant that he is being sued
2. Pleadings: documents the parties file with the court when they first state their cases
a. Complaint: states the Plaintiffs claim
b. Answer:
Defendants response to the Complaint, admitting or denying the allegations
May also include an affirmative defense
c. Reply: some jurisdictions allow (or require) the Plaintiff to respondent to an affirmative defense or
3. Motion to Dismiss: a motion by the Defending asserting that the Plaintiff has case; if successful, Defendant wins
4. Discovery: allows the parties to get facts and narrow and clarify the issues for trial via depositions, interrogatories,
requests for admission, etc.
5. Summary Judgment: device for disposing of relatively clear cases without a trial if
a. There is no genuine issue of material fact; and
b. The party is entitled to judgment as a matter of law
6. Pretrial Conference: the judge meets informally with the attorneys, and may try to get the attorneys to narrow the
issues for trial or settle
7. Trial: adversary process occurring before a judge or jury
8. Appeal: hearing by a higher court to determine whether the lower court committed an error of law
Alternative Dispute Resolution
A. Devices, other than lawsuits, for resolving civil disputes
B. Benefits
1. Quicker resolution
2. Lower costs
3. Use of decisionmakers with specialized expertise
4. Potential for compromise that reflects a consensus by both parties
C. Common Forms
1. Settlements: contracts where the Defendant agrees to pay the Plaintiff a sum of money in exchange for the
Plaintiffs promise to release the Defendant from liability
2. Arbitration: the submission of a dispute to a neutral, nonjudicial third party who issues a binding decision to
resolve the dispute
3. Court-Annexed Arbitration: arbitration where the losing party still has the right to a regular trial
4. Mediation: a neutral third party helps the parties reach a shared resolution of their dispute by aiding the parties in
communication, clarifying areas of agreement and disagreement, pointing out the others viewpoint, and
suggesting settlement options
5. Summary Jury Trial: an abbreviated, nonpublic mock jury trial that does not bind the parties to better reveal the
merits of the parties cases
6. Minitrial: informal, abbreviated private trial to promote the settlement of disputes
Definition of a Tort
A. A civil wrong other than a breach of contract
B. Includes for types of wrongs
1. Intent
a. The desire to cause certain consequences; or
b. The substantial certainty that those consequences will result from ones behavior
2. Recklessness: a conscious indifference to a known and substantial risk of harm created by ones behavior
3. Negligence: a failure to use reasonable care, making harm to another party a probable result
4. Strict liability: responsibility irrespective of fault
C. Generally involves a suit between private parties (as opposed to a suit by the government against a defendant in criminal
D. The standard of proof = a preponderance of the evidence
1. More than 50%
2. Compare the standard to that of a criminal case, which is beyond a reasonable doubt
E. Types of damages available to a winning plaintiff include
1. Compensatory damages: account for the harm suffered as a result of the defendants wrongful act
2. Punitive damages: punish and deter flagrant wrongdoers
Interference with Personal Rights
A. Battery
1. Elements
a. Intentional and harmful or offensive touching of another
b. Without consent
2. Intent
a. Requires either
Intent to cause harmful or offensive contact; or
Intent to cause apprehension that such contact is imminent
b. Transferred intent: a defendant who intends to inure one person but actually injured another is liable to
the person injured
3. Touching
a. Does not require direct contact between the defendants body and the plaintiffs body
b. Includes anything attached to the plaintiffs body, such as a hat
c. The plaintiff does not need to be aware of the touching at the time it occurs
4. Consent
a. If the plaintiff consented to the touching, the defendant is not liable
b. Consent can be inferred from a persons voluntary participation in activity, but is limited to contacts that
are a normal result of the activity
c. The law infers consent to many touchings that are customary or reasonably necessary in normal social
life, such as bumping into someone on a crowded street
5. Offensive nature
a. Must offend a reasonable sense of personal dignity
B. Assault
1. Elements
a. Intentional attempt or offer to cause a harmful or offense contact with another person
b. That causes a reasonable apprehension of imminent battery
**Note that assault thus can result from an attempted battery**
Also note that the anticipated battery must be imminent, or about to occur; threats of a
future battery are not sufficient
C. Intentional Infliction of Emotional Distress
1. Elements
a. Outrageous conduct
b. That results in severe emotional distress
Most courts require intent or recklessness on behalf of the defendant
A few courts require proof of some bodily harm
Some courts also require that the distress be the kind that a reasonable person of ordinary
sensibilities would suffer
2. The Supreme court, however, has severely restricted the ability of public figures to win speech-related intentional
infliction of emotion distress cases, requiring them to show the same requirement as in defamation cases: Hustler
Magazine, Inc. v. Falwell
D. False Imprisonment
1. Elements
a. Intentional confinement of another person
b. For an appreciable time (a few minutes is sufficient)
c. Without consent
2. Confinement
a. Can result from
Physical barriers;
Threatened use of force; or
Unfounded assertion of legal authority to detain the plaintiff;
A threat to harm to another
b. Must be complete
False imprisonment will not result where only one means of escape is blocked while others
However, the plaintiff must reasonably be expected to know of the alternate means of
c. Must be known by the plaintiff
3. Conditional privilege: statutes passed by most states permit storeowners to confine suspected shoplifters, so long
as the owner
a. Acts with reasonable cause and in a reasonable manner; and
b. Detains the suspect for a reasonable amount of time
E. Defamation
1. Elements
a. Unprivileged
b. Publication of (communication to one person other than the defamed)
c. False and defamatory
d. Statements concerning another


Two forms
a. Libel

Generally written or printed defamation

Can also include other defamation with a more or less permanent physical form such as
a) Pictures
b) Signs
c) Statues
d) Radio/Television broadcasts
Due to the more permanent nature of the written word, plaintiffs traditionally recover
without proof for special damages (actual reputational injury or other actual harm)
Presumed damages (compensation for assumed reputational harm without actual proof of
the harm) are permitted
b. Slander: mainly oral defamation
Generally not actionable without proof of special damages
Slander per se, however, is actionable without proof of special damages
Slander per se includes false statements that the plaintiff
a) Has committed a crime involving moral turpitude or potential imprisonment;
b) Has a loathsome disease;
c) Is professionally incompetent or guilty of professional misconduct; or
d) Is guilty of serious sexual misconduct
3. Defenses
a. Truth is a complete defense to a defamation claim
b. Privileges: recognize that in some circumstance, other social interests outweigh an individuals right to
Absolute privilege
a) Complete defense
b) Includes statements made by
1) Participants in judicial proceedings
2) Legislators or witnesses in the course of legislative proceedings
3) Certain executive officials in the course of their duties
4) One spouse to the other in private
Conditional (or qualified) privileges
a) Provides a defense as long as the defamatory statements are not made with
knowledge of their falsity or with reckless disregard for the truth; when the statement
does not advance the purpose of the privilege; or when it is unnecessarily made to
inappropriate people
b) Include
1) Statements made to protect or further the legitimate interests of another
2) Statements made to promote a common interest
3) Fair comment (fair and accurate media reports)
4. Public v. Private Plaintiffs
a. New York Times Co. v. Sullivan held that the First Amendment does afford some protection in defamation
cases, depending on the plaintiff and the topic
b. Cases involving public officials and public figures
Require the Plaintiff to show
a) Actual malice: knowledge the statement is false or with reckless disregard to the
statements falsity
b) By clear and convincing evidence
Allow damages for proven actual injury, presumed damages, and punitive damages
c. Cases involving private figures
If subject of public concern
a) Require Negligence
b) Allow damages
1) For proven actual injury if only negligence
2) For presumed and punitive damages if actual malice is established by clear
and convincing evidence
If subject of private concern
a) Likely requires at least negligence
b) Allows damages for proven actual injury, presumed damages, and punitive damages
Invasion of Privacy
1. Intrusion on Solitude or Seclusion
a. Intentional intrusion on another
b. That would be highly offensive to a reasonable person
2. Public Disclosure of Private Facts
a. Publication of facts concerning someone private life
b. That would be highly offensive to a reasonable person
c. **Differs from defamation because requires widespread communication of private facts in order to be
actionable, such as publication on the Internet**
3. False Light Publicity
a. Publicity placing a person in a false light in the public eye
b. That would be highly offense to a reasonable person
c. Truth is a defense
4. Commercial Appropriation of Name or Likeness (usually involves an implication of someone elses endorsement of
a product or service or non-existent connection to a business)
G. Misuse of Legal Proceedings
1. Malicious prosecution
a. Wrongful institution of criminal proceedings
b. Elements
The Defendant caused the criminal proceedings to be initiation against the Plaintiff without
probable cause
Improper purpose
Proceedings were eventually terminated in the Plaintiffs favor
2. Wrongful use of civil proceedings: civil counterpart to malicious prosecution
3. Abuse of process: initiation of proceedings for an improper purpose
H. Deceit (Fraud): knowing misrepresentation
Interference with Property Rights
A. Trespass to Land: any unauthorized or unprivileged intentional intrusion upon anothers real property
1. Includes
a. Physically entering the Plaintiffs land;
b. Causing another to physically enter the Plaintiffs land;
c. Remaining on the land after the right to remain has ceased;
d. Failing to remove items from the land with a duty to do so;
e. Causing an object or thing to enter the land; and
f. Invading the airspace above the land or the subsurface beneath it
2. Requires only the intent to be on the land or to cause it to be invaded thus it can result from the mistaken belief
of a right to be on the land
B. Private Nuisance: substantial and unreasonable interference with the Plaintiffs use and enjoyment of his or her land
C. Conversion: intentional exercise of control over personal property without consent
A. Elements
1. Duty
2. Breach
3. Actual cause
4. Proximate cause
5. Damages
B. Duty
1. Reasonable care: each person must act as a reasonable person of ordinary prudence would have acted under
the same or similar circumstances
2. A duty is owed
a. To foreseeable plaintiffs: those who are foreseaeably at risk of harm caused by ones activities or
b. Or if a special relationship exists between the parties
Professionals (lawyers, doctors, etc.) must exercise the knowledge, skill and care ordinarily
possessed and employed by members of the profession
Property owners owe special duties to those who enter their property
a) Invitees (business visitors or public invitees)
1) Owner must exercise reasonable care for the safety of invitees
2) Must take appropriate steps to protect the invitee against dangerous onpremises conditions that he knows about or reasonably should discover, and
that the invitee is unlikely to discover
b) Licensees (those entering the property for their own purpose but with consent): owners
must warn licensees of dangerous conditions they are unlikely to discover
c) Trespassers
1) Traditionally courts only charged owners with a duty to not willfully and
wantonly inure trespassers whose presence is known
2) Courts now often require a higher level of care for trespassers who regularly
enter the land and children known to be likely to trespass
C. Breach: negligent conduct
1. Failure to act with reasonable care (as a hypothetical person with ordinary prudence and sensibilities would have)
2. Courts consider various factors such as
a. Reasonable forseeability of harm
b. Seriousness or magnitude of harm
c. Personal characteristics of the Defendant
Children are generally required to act like a reasonable person of similar age, intelligence
and experience would
A physically disabled person must act as would a reasonable person with the same
3. Negligence per se
a. A violation of laws that determine how a reasonable person should act
b. Plaintiffs must show
They were within the class of persons intended to be protected by the statute or other law;
They suffered harm of a sort that the statute or other law was intended to protect against
D. Actual Cause
1. But for test: But for the Defendants actions, the Plaintiff would not have been injured
2. Substantial factor: when the conduct of two or more Defendants combines to cause the injury, the courts look
to whether the conduct of each was a substantial factor in causing the injury
E. Proximate Cause
1. Definition
a. The harm suffered by the Plaintiff was a foreseeable result of the Defendants actions
b. I.e., Defendants are only liable for the natural and probable consequences of their actions


Later Acts, Forces, or Events

a. If foreseeable, will not relieve the Defendant of liability
b. If unforeseeable, or an intervening cause, the Defendant is not liable
Damages: harm to the plaintiff
1. Personal injury (physical or bodily injury)
2. Property damage
3. Economic loss
G. Res Ipsa Loquitur
1. The thing speaks for itself
2. If a Plaintiff has no way of knowing what caused the injury, a presumption of breach and causation arises if
a. The Defendant has exclusive control of the instrumentality of harm;
b. The harm that occurred would not ordinarily occur in the absence of negligence; and
c. The Plaintiff was not responsible for his own injury
H. Defenses
1. Contributory Negligence
a. The Plaintiff failed to exercise reasonable care for his or her own safety
b. Complete defense
2. Comparative Negligence
a. Courts look at the relative negligence of the Plaintiff and Defendant and award damages in proportion to
the degree of fault of each
b. Plaintiffs recovery = Defendants percentage share of the negligence causing the injury X Plaintiffs
proven damages
In states using a pure system, the Plaintiff will always recover
In states using a mixed system, the Plaintiff will only recover if the Defendants share of the
negligence is greater than or equal to 50%
3. Assumption of Risk: voluntary consent to a known danger
a. Implied: inferred from the facts
b. Express: entering into a contract purporting to relieve the Defendant of a duty
Strict Liability
A. Defined as liability regardless of fault
B. Applies to
1. Abnormally dangerous activities (i.e., blasting, crop dusting, and stunt flying)
a. Contributory negligence is not generally a defense
b. Assumption of risk has been a defense
2. Manufacture or sale of defective and unreasonably dangerous products
A. Agency: a two-party relationship where one party is permitted to act on behalf of, and under the control of, another party
B. Agent: the party authorized to act on behalf of, or under the control of, someone else
C. Principal: the party who permits another to act on his or her behalf
Characteristics of an Agency
A. Created by the appearance of an agreement between two parties that one will act on the others behalf
1. The test for the existence of an agency is objective, i.e., would a reasonable person believe that a relationship
exists based on the parties behavior and the surrounding facts and circumstances
2. Consequently, an agency may exist even if neither party knows of the existence or subjectively desires the
3. An agency, however, is often created by contract, which can be written or oral unless otherwise prohibited by
state law
4. Euclid Plaza Associates, LLC v. African American Law Firm, LLC:
a. Creation of an agency relationship requires three characteristics:
Agent possesses power to alter legal relations between the principal and third parties and
between the principal and him or herself
Agent acts a fiduciary regarding matters within the agencys scope
Principal has the right to control the agents conduct
b. Court finds no agency exists because the third party did not know of the principals existence as
apparent authority develops solely from the acts of the principal
B. If principals or agents lack the necessary mental capacity when the agency is formed, they can generally release
themselves from the agency at their option
C. Some duties are nondelegable and cannot be performed by the agent, such as
1. Making statements under oath
2. Voting in public elections
3. Signing a will
Concepts and Types of Agency
A. Authority: an agents ability to affect his principals legal relations
1. Generally, an agent can bind his principal only when the agent has authority to do so
2. Types of authority
a. Actual: created by communication to the agent either through:
Express authority: the actual words of the principal, indicating the extent of the agents
Implied authority: whatever is reasonable to assume that the principal wanted the agent
to do, given the principals express statements and surrounding circumstances
b. Apparent: created by communication to a third party
Agents cannot give themselves apparent authority
Does not exist where an agent creates an appearance of authority without the principals
The third party must reasonably believe in the agents authority
B. Types of Agents
1. General agent: continuously employed to conduct many transactions
2. Special agent: employed to conduct a single transaction or a small, simple group of transactions
3. Gratuitous agent: agent who receive no compensation for services
a. Have the same power to bind their principals as paid agents
b. Sometimes owe less duties to the principal due to gratuitous nature of relationship
4. Subagents: an agent of an agent
a. Created by an agent who has authority to make a subagent his or her own agent for conducting the
principals business
b. The agent creating the subagency then becomes a principal with respect to the subagent
c. The subagent is also the original principals agent
5. Employees v. independent contractors
a. Differentiated by the principals right to control the physical details of the work
Employees are subject to control of the physical details of the work
Independent contractors generally are hired to produce a result and determine on their own
how the result will be achieved
b. The distinction is often crucial in determining the principals liability or responsibility for torts (civil
c. Eisenberg v. Advance Relocation & Storage, Inc.:
The Reid factors determine whether an individual is an employee v. an independent
a) Hiring partys right to control the manner and means by which the product is
b) Skill required
c) Source of instrumentalities and tools
d) Location of the work
e) Duration of the relationship
f) Whether the hiring party has the right to assign additional projects
g) Extent of the hiring partys discretion over when and how long to work
h) Method of payment
i) Hired partys role in hiring and paying assistants
j) Whether the work is part of the regular business of the hiring party
k) Whether the hiring party is in business
l) The provision of employee benefits; and
m) The tax treatment of the hired party
The greatest emphasis should be placed on the first factor
Fiduciary Duties of Agent
A. Duty of Loyalty
1. Avoid conflicts of interest with principal
a. Agent is forbidden to deal with himself when conducting the principals business
Exception is if the principal consents
b. Agent cannot compete with the principal
c. Agent cannot act on behalf of another party without the principals consent
2. Avoid disclosure of confidential information acquired through the agency
a. Includes information entrusted by the principal to the agent, such as facts that are valuable to the
principal because they are not widely known
b. ABKCO Music Inc. v. Harrisongs Music, Ltd.:
Duty not to use confidential information exists after employment as well as during
Court found that the defendant used confidential information, gained during his
employment by the plaintiff to assist a third party, i.e., the economic potential of George
Harrisons songs
B. Duty to Obey Instructions
1. Agents have a duty to obey the principals reasonable instructions
2. There is no duty to obey orders to behave illegally or unethically
3. If a principals instructions are unclear, the agent has a duty to communicate and clarify
C. Duty to Act with Care and Skill
D. Duty to Notify the Principal
1. Must tell the principal about matters that are reasonably relevant or material
2. No duty to notify where the agent receives privileged or confidential information
3. Olsen v. Vail Associates Real Estate, Inc.:
a. A real estate broker breaches a fiduciary duty by concealing material facts from the seller (information
that bears on the transaction in question)
b. Knowledge of the sale price of nearby property, after the contract was signed, would not have affected
the principals decision-making, and therefore was not material no duty to disclose
E. Duty to Account
1. The agent must give the principal any money or property received in the course of the agency business
2. Agents must keep accurate records and accounts of all transactions and disclose them to the principal upon
3. Agents should not commingle the principals property with his or her own property (such as combining funds in
the agents own bank account)
Duties of the Principal to the Agent
A. Duty to Compensate the Agent
1. If compensation is due but the amount has not been expressly stated, the amount is the market price or the
customary price for the agents services

Duty of

Compensation may depend on the achievement of a specific result, i.e., a lawyers agreement to be paid based on
a certain percentage of recovery if a suit or settlement is successful
The principal must cooperate with the agent in achieving the desired result
A principal generally need not compensate an agent who has materially breached the agency contract or
committed a serious breach of fiduciary duty
Reimbursement and Indemnity
Principal must pay an agent back for expressly or impliedly authorized expenditures
Principal must indemnify an agent for any losses incurred in carrying out the agency, unless the losses resulted
from the following and the principal did not benefit
a. Unauthorized acts
b. Losses due solely to the agents negligence or other fault
Termination of Agency
A. By Act of the Parties
1. At a time or upon the happening of an event stated in the agency agreement
2. When a specific result is accomplished, provided the agency was created to achieve the result
3. By mutual agreement of the parties, at any time
4. At the option of either party
a. Revocation: at the principals option
b. Renunciation: at the agents option
c. Parties can revoke or renounce even if they violate their agreement by doing so, but they may be liable
for damages to the other party (they have the power to terminate, but not necessarily the right)
B. By Operation of Law
1. Death of the principal
2. Death of the agent
3. Principals permanent loss of capacity, such as insanity
a. Trepanier v. Bankers Life & Casualty Co.
A principal in a comatose state is deemed to be only temporarily incapacitated
Agency contracts involving temporary incapacitation are at most voidable and do not
automatically terminate
4. Agents loss of capacity to perform the agency business
5. Changes in the value of the agency property or subject matter
6. Changes in business conditions
7. The loss or destruction of the agency property or subject matter or the termination of the principals interest
8. Changes in the law that make the agency business illegal
9. The principals bankruptcy
10. The agents bankruptcy (if the financial condition affects the agents ability to perform)
11. Impossibility of performance by the agent
12. Serious breach in the agents duty of loyalty
13. The outbreak of war
C. Exception: Agency coupled with an interest
1. The agent has an interest in the subject matter of the agency, independent from the principal, such as a secured
loan agreement authorizing a lender to sell property used as security if the debtor defaults
2. Not terminated by
a. The principals revocation
b. The principals or the agents loss of capacity
c. The agents death; and
d. Generally the principals death
3. Does terminate when the principal performs his or her obligation
D. Effect
1. Agents express and implied authority come to an end
2. Ex-agents may, however, still retain apparent authority, unless the termination was caused by
a. The principals death
b. The principals loss of capacity; or
c. Impossibility
3. Apparent authority also ends when the third party receives appropriate notice
a. Actual notice is required if the third party has previously dealt with the agent
Direct personal statement to the third party
Writing delivered to the third party personally, to his or her place of business, or to some
other reasonable location.
b. Constructive notice (advertising the termination in a newspaper of general circulation or any other
inform third parties) is sufficient for all other parties
Contract Liability of the Principal
A. Review of Types of Authority
1. Actual Authority
a. Express Authority: created by principals words to the agent
b. Implied Authority
Whatever is reasonable to assume that the principal wanted the agent to do, in light of the
principals express statements and the surrounding circumstances
Usually derives from a grant of express authority
Generally determined by the nature of the agency business, the relations between principal
and agent, customs in the trade, and other facts and circumstances
2. Apparent Authority
a. Created by
Communications by the principal to the third party
That create a reasonable appearance of authority in the agent
b. Becomes important in cases where the principal has told the agent not to make certain agreements that
the agent ordinarily would have actual authority to make, but
The third party knows nothing about the limitation; and
Has no reason to know about it.
c. Opp v. Wheaton Van Lines, Inc.:
The court found no apparent authority because it determined that the defendant could not
reasonably conclude that the would-be principal knew the bill of lading had to be signed in
California and that the plaintiffs husband had authority to do so.
It reasoned that the would-be principal told the defendants that she wanted the full
replacement value and never designated a lawful representative on the space provided in the
estimate form.
B. Agents Notification and Knowledge
1. Proper notification by a third party to an agent with actual or apparent authority will bind the principal
2. Proper notification by the agent to the third party, in turn, is considered notification by the principal
C. Ratification
1. Binds the principal as if the agent had possessed authority to conduct an authorized act
2. Conduct amounting to ratification includes
a. Express ratification: principal communicates an intent to ratify by words, either written or oral
b. Implied ratification: principals behavior displays an intent to be bound by
Part performance of a contract made by an agent;
Acceptance of benefits under the contract; or
Sometimes, silence, acquiescence, or failure to repudiate
3. Additional Requirements
a. Act must be valid at the time of performance
b. Principal must have existed at the time the agent acted
c. Agent must have indicated that he or she was acting for the principal, and not him or herself (but the
agent need not have disclosed the principals identity)
d. Principal must be legally competent at the time of ratification;
e. Principal must have knowledge of all material facts agents knowledge is not imputed to the principal
The Work Connection, Inc. v. Universal Forest Products, Inc.: contract was not ratified
because the principal lacked knowledge of material facts, i.e., that the principal had to provide
workers compensation insurance
Principal must ratify the entire contract
g. Principal must use the same formalities required to give the agent authority to execute the transaction
4. Principals ratification is binding even if not communicated to the third party
5. Principal may not revoke the ratification
6. Intervening events may cut off the principals power to ratify, such as
a. Third partys withdrawal from the contract;
b. Third partys death or loss of capacity;
c. Principals failure to ratify within a reasonable time; and
d. Changed circumstances, especially when a greater burden is placed on the third party
D. Contracts made by subagents: the same rules governing a principals liability for agents conduct, generally apply to
Contract Liability of the Agent
A. The Nature of the Principal
1. Disclosed
a. A third party knows or has reason to know
That the agent is acting for a principal; and
The principals identity
b. Agent is not liable on authorized contracts made for the principal, unless he or she agrees otherwise
2. Partially disclosed
a. The third party
Knows or has reason to know that the agent is acting for a principal; but
Lacks knowledge or reason to know the principals identity
b. Agent is liable on contracts unless the parties agree otherwise
3. Undisclosed
a. The third party lacks knowledge or reason to know of both the principals existence and the principals
b. Agent is liable on contracts
c. Principal may enforce a contract against a third party who refuses to perform at all
4. Nonexistent
a. Unless agreed otherwise, the agent is personally liable on contracts for a legally nonexistent principal
B. Liability of Agent by Agreement
1. Agent may be liable by expressly agreeing
a. Agent makes contract in his or her own name
b. Joins the principal as an obligor on the contract
c. Acts as a surety or guarantor for the principal
C. Implied Warranty of Authority
1. An agent may be liable if he contracts on behalf of a legally existent principal, while having no authority to do so
2. Exceptions
a. Third party actually knows the agent lacks authority
b. Principal subsequently ratifies the contract
c. Agent adequately notifies the third party that he does not warrant his authority to contract
Reed v. National Foundation Life Insurance Co.:




Although the agent stated that the contract would become effective upon signing of
documents and payment of the first premium, the documents signed indicated that the
agent had no authority to make a policy effective
Thus, the third party had imputed knowledge of the agents lack of authority, and no
implied warranty was found

Tort Liability of the Principal
A. Respondeat Superior Liability
1. A principal who is an employer is liable for torts (civil wrongs) committed by agents
a. Who are employees; and
b. Who commit the tort while acting within the scope of their employment
Of the kind that the employee was employed to perform
a) Millan v. Dean Witter Reynolds, Inc.: Employee greatly exceeded the scope of his
employment by stealing money from his mother
Occurred substantially within the authorized time period
Occurred substantially within the location authorized by the employer
Motivated at least in part by the purpose of serving the employer
2. Principal is liable both for intentional torts and negligence
B. Direct Liability
1. Principal is responsible for an agents tortious conduct if
a. The principal directs that conduct; and
b. Intends that it occur
2. No need to impute liability if principal himself is at fault
C. Liability for Torts of Independent Contractors
1. Principals are ordinarily not liable
2. Exceptions
a. Can be directly liable for tortious behavior connected with retention of an independent contractor, such
as negligent hiring
b. Liable for harm resulting from the independent contractors failure to perform a nondelegable duty
c. Liable for an independent contractors negligent failure to take the special precautions needed to
conduct certain highly dangerous or inherently dangerous activities
D. Liability for Agents misrepresentations
1. Directly liable for
a. Misrepresentations that the principal intended the agent to make
b. Negligently allowing the agent to make misrepresentations, in some states
2. May be liable for an agents misrepresentations if the agent had actual or apparent authority to make true
statements on the subject
3. Exculpatory clauses can shield the principal from liability as long as he or she did not intend that the agent make
false statements
Tort Liability of the Agent
A. Generally liable for own torts
B. Exceptions
1. Exercising a privilege of the principal
2. Principal who is privileged to take certain actions in defense of his person or properly may often authorize an
agent to do so
3. Agent neither knew or had reason to know of informations falsity
4. Injury resulted from defective tools or instrumentalities furnished by the principal unless the agent had actual
knowledge of the defect
Tort Suits Against Principal and Agent
A. Jointly and severally liable (can be sued together or individually)
B. If an entire judgment is obtained against one party, the other party may be required to indemnify (pay back) the paying