Exam 39: Liability of Principal and Agent; Termination of Agency

If a principal directs the agent to commit a tort or knows for a fact that the agent carrying out his instructions could cause someone harm, then the principal is liable.

Where a third party deals with an agent, but is unaware that he/she is dealing with an agent, the principal would be contractually bound to the third party for any tort.

A principal is considered to be vicariously responsible for his/her agent's torts if:

An agent is not liable for torts of other agents unless he is personally at fault.

Apparent authority arises from the third party's interpretation of the agent's words and actions.

Unlike wives, children are not presumed at common law to be agents or extensions of the father.

The principal's unilateral termination of agency is known as _____ of agency.

According to the doctrine of _____, a person will not be allowed to deny a promise or assertion he/she previously made where there has been detrimental reliance on that promise or assertion.

The key to determining whether a principal is liable for contracts made by his agent is the amount of compensation paid to the agent.

In agency, _____ authority is a situation in which an agent leads a third party to believe that the agent has authority to bind the principal, even where the agent lacks actual authority to bind the principal.

In case of the use of automobiles, explain two approaches that impose tort liability on the owner of the automobile.

A principal can be held responsible for an agent whose authority has previously been terminated if the principal does not make the termination known to the parties who previously did business with the agent. This is known as _____ authority.

The _____ doctrine imposes vicarious liability on the principal in case of an agency relationship.

Abigail Agent is asked by Principal to buy a parcel of real estate for Principal's business expansion, but not to reveal the existence of the agency relationship. a. It is unconscionable for Agent to trick the third party by not disclosing the agency. b. Agent may be liable to the third party. c. Agent can have no liability to the third party, only Principal is liable. d. Third Party has no recourse against either Principal or Agent. e. Principal cannot be liable to Third Party

Even if the agent possessed no actual authority and there was no apparent authority on which the third party could rely, the principal may still be liable if he ratifies or adopts the agent's acts before the third party withdraws from the contract.

Under the family purpose doctrine for the use of automobiles, a family member who negligently injures someone with a car subjects the owner to liability if the family member was furthering family purposes.

When an agency is terminated after lapse of time or completion of work, it is said to be expressly terminated.

Termination of agency by operation of law occurs:

Bob, a professional hockey player, asks Will to be his sports agent and Will accepts. Bob tells Will that Will can review the contracts offered to Bob from the various state hockey teams. Here, Will has _____ authority to review contracts.

An agent is personally liable for torts she commits in the scope of employment.