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THE AGENCY RELATIONSHIP (AGENT + PRINCIPAL) I. BASICS: consensual + contractual; **Contractual Capacity: Principal MUST have capacity; Agent only MI IMA! capacity "not contractual capacity# $or%alities: $or%alities are &T re'uire( "(on)t nee( *riting# U !+SS e'ual (ignities "*hen A enters into a lan( , on -ehal. o. P that %ust -e in *riting/ then agency , %ust also -e in *riting/ provi(e( A can convey to 0 r( person# II. FIDUCIARY DUTIES OF AGENT TO PRINCIPAL ***** !&1A!T1: ** A %ust put P)s interest .irst an( e2clusively 3 A can &T -ene.it in a con.lict o. interest &pportunity $act Pattern: I. opportunity arises (uring agency/ A %ust .irst o..er it to P *4 $U!! 5IS!C&SU6+ o. MAT+6IA! $ACTS/ an( give P a 6+AS&A 7!+ &PP&6TU IT1 to purchase 3 i. P (eclines then A can (o it 5uty o. Care: A %ust e2ercise 6+AS& A7!+ CA6+ in per.or%ing their (uties 5uty o. &-e(ience: A %ust o-ey 6+AS& A7!+ I ST6UCTI& S 5uty to Account .or 8 9 Property 6eceive(: Any 8 the A gets in course o. (uties is P)s not A)s 5uty ot to Serve as 5ual Agent: Can &T serve as :(ual; agent U !+SS A (iscloses it to -oth P)s an( -oth agree III. FIDUCIARY DUTIES OF PRINCIPAL TO AGENT 5uty to 6ei%-urse: P %ust rei%-urse .or 6+AS& A7!1 I CU66+5 e2penses 5uty to In(e%ni.y: P %ust in(e%ni.y A .or 6+A&S& A7!1 I CU66+5 !+<A! !IA7I!ITI+S 5uty to Co%pensate: P %ust co%pensate A i. +IT=+6 1# agree%ent e2pressly provi(es .or it &6 ># agree%ent is silent on it ":i%plie(; rt to pay# 7UT i. e2pressly provi(es .or & pay/ no (uty to co%pensate ":gratuitous; agency# 5uty to Cooperate: P can &T I T+6$+6+ *4 A)s (uties A 5 %ust A$$6IMATI?+!1 AI5 *here reasona-ly re'uire( IV. REMEDIES FOR BREACH OF DUTY 7asic 6e%e(y: 5AMA<+S put in position *oul( have -een in -ut .or the -reach A((t)l 6e%e(ies $or 7reach o. !oyalty: A is &T entitle( to co%pensation (uring perio( o. -reach i. -reach *as I T+ TI& A! A C& ST6UCTI?+ T6UST can -e i%pose( to get :opportunity; property at the A)s cost CONTRACT PROBLEMS (AGENT + PRINCIPAL + THIRD PARTY) I. AUTHORITY: I. there *as actual/ apparent/ or rati.ie( authority there is a , -4* P an( 0P; other*ise , -4* A an( 0P Actual: Authority :grante(; -y the P to the A "e2press or i%plie(# +2press P use( @&65S to grant authority "Precisely an( A66&@!1 construe(# MistaAe4$rau( &T groun(s to invali(ate the authority I%plie( Authority *hich A 6+AS& A7!1 7+!I+?+S they have -ase( on C& 5UCT o. P Sources: 1#Inci(ental to +2press Authority; >#In(ustry Custo% A ,no*s; 0#Prior Ac'uiescence -y P; B#+%ergency 7usiness Measures "A has i%plie( auth to act in reasonable prudent %anner# 5elegation: ** There is &T i%plie( authority .or A to (elegate to so%eone else U !+SS e2ception applies "in(ustry custo%/ prior (ealings/ e%ergency/ routine .unctions 3 purely %echanical acts# A 6epresent More than 1 P in Sa%e Transaction: ** &nly allo*e( i. A gives .ull (isclosure to -oth P)s an( they -oth approve/ other*ise can)t Ter%ination The I STA T the agency ter%inates/ A)s authority to act on -ehal. o. P IMM+5IAT+!1 en(s +?+ I$ A (oes &T , &@ it has en(e( Metho(s: 1#, ter% en(ing >#Unilateral act o. +IT=+6 party 0#A -reaches (uty o. !&1A!T1 B#Material Change in Circu%stances C# ***5eath or Incapacity 3 I STA T!1 en(s authority +2ception: Agency Couple( *4 an Interest "*hen A has an interest it can)t -e ter%inate( unilaterally -y P 3 usually to repay (e-t to4-orro* 8 .ro% A 3 A %ust have a present po*er to e2ercise rt to property# Apparent: o actual/ -ut -ase( on 0P 6+AS& A7!+ 7+!I+$ A has authority T+ST: P :cloaAe(; A *4 APP+A6A C+ o. actual authority + 0P 6+AS&A 7!1 6+!I+5 on the appearance "=ol(ing &ut Test# ***Secret !i%iting Instruction: A has actual authority -ut P gave a li%iting instruction secretly to AD A goes -eyon( that instruction P -oun( -4c apparent E A -eache( (uties o. o-ey 9 loyalty so P can get (a%ages ***!ingering Authority: Actual auth ter%inate( -ut A continues to act on P)s -ehal. P -oun( -4c apparent

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Proper otice 6ule: To avoi( P %ust give TIM+!1 an( P+6S& A! notice to custo%er)s A has (ealt *4 -e.ore + Pu-lication .or rest o. *orl( "ne*spaper/ tra(e pu-lication# ***@ritten Authority +n(e(: P authoriFes A to enter into , -y giving *ritten authority -ut *hen agency en(s (on)t get *ritten authority -acA P is -oun( -4c apparent authority 6ati.ication: Authority grante( A$T+6 , *as atte%pte( to -e %a(e *4o authority T+ST: P , &@S all %at)l .acts + P e2pressly4i%plie(ly rati.ies + 6ati.ication can &T alter ter%s ot +..ective: 0P 5I+S4incapacitate( at ti%e o. rati.y; 0P *ith(ra*s -e.ore rati.y; P is un(isclose( II. LIABILITY 0P is Plainti..: Principal !ia-le i. A 1 Ain( o. authority "actual/ apparent/ rati.ie(# Agent !ia-le i. 1# o vali( authority "-reach o. :i%plie( *arranty o. authority# ># P *as partially (isclose( "i(entity conceale(# &6 0#P *as un(isclose( ".act there *as a P at all conceale(# TIP: 5on)t (iscuss type o. P *hen (iscussing lia-ility o. P "irrelevant# only relevant .or lia-ility o. A 3 P9A -oth lia-le i. there *as vali( authority + P *as partially (isclose( or un(isclose( 0P is 5e.en(ant: 5isclose( P &nly the P " &T the A# can en.orce the contract Partially 5isclose(4Un(isclose( P +IT=+6 P or A can en.orce the contract "i. A en.orces it is .or P# U !+SS P .rau(ulently conceale( his i(entity E then P can)t en.orce &6 coul( increase( -ur(en to 0P TORT PROBLEMS (Resp !"e#$ S%pe&' &(V')#&' %s L'#*'+'$,) I. RULE: Principal "+6# @I!! -e vicariously lia-le .or torts co%%itte( -y an agent "++# I$ +%ployer4+%ployee relationship e2ists A 5 tort co%%itte( *4in the scope o. e%ploy%ent In(epen(ent ,ers: &T variously lia-le .or in(ep contractors U !+SS inherently (angerous activity +%ployer vicariously lia-le .or torts -y agent I$ e%ployerEe%ployee + *4in scope o. e%ploy%ent II. EMPLOYER-EMPLOYEE RELATIONSHIP $actors: +%ployee vD In(epen(ent , 1D =o* person 5esignate( 2. =o* Pai( "In( ,er pai( -y hr or Go-; ++ salary# 3. @ho)s Tools Use( "In( ,er -ring o*n tools; ++ use +6)s tools# BD C& T6&! &6 6I<=T &$ C& T6&! "greater control %ore liAely ++# Su-E+%ployees: +6 &T lia-le i. ++ hire( the% @IT=&UT authority "are lia-le i. ha( authority# U !+SS -usiness e%ergency 7orro*e( +%ployees: &riginal +6 IS lia-le U !+SS there has -een clear shi.t in C& T6&! to the :-orro*ing; +6 In(epen(ent Contractor: *** +6 only lia-le i. inherently (angerous activity "use poison/ e2plosions/ guns/ (e%olition/ electricity/ other things that -eco%e (ang un(er the circ# III. SCOPE OF EMPLOYMENT T+ST: I. any 1 .actor %issing then it is either a (etour or a .rolic Con(uct :o. the Ain(; ++ hire( to per.or% reasona-ly si%ilar Go- (escription Tort occurre( :on the Go-; ti%e an( space .acts ++ :inten( to -ene.it; the +6 only has to -e partial intent to -ene.it +6 Conclusions: All 0 Met Con(uct *4in scope o. e%ploy%ent an( +6 IS vicariously lia-le Slight 5eviation 5+T&U6 an( +6 IS vicariously lia-le !arge 5eviation $6&!IC an( +6 IS &T vicariously lia-le Intentional Torts4$orce4?iolence: **** +6 &T lia-le .or intentional tort o. ++ involving .orce or violence "-attery/ assault/ violent trespass to lan( 3 (a%ages lan(# U !+SS .orce is $&6+S++A7!+ $oreseea-le: $orce is authoriFe( 3 police/ security guar(/ -ouncers/ .oot-all players $riction generate( -y type o. e%ploy%ent 3 repo people/ (e-t collection Se2ual Assault Cases:*** +6 can -e lia-le i. $&6+S++A7!+ "? un(er se(ation/ (i%inishe( capacity 3 (octors/ therapists/ clergy# IV. MISCELLANEOUS In(e%ni.ication: I. +6 lia-le .or ++)s tort/ +6 has right to in(e%ni.ication .ro% ++ 6elease: I. ++ is release( .ro% lia-ility/ +6 can &T -e vicariously lia-le

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ote: 5istinguish -4* *hen +6 vicariously lia-le an( *hen +6 lia-le .or o*n negligence .or negligent supervision or negligent selection4hiring