BCOR 320 1nd Edition Lecture 30 Chapter 16 Agency Law cont Principals Liability for Contracts The principal is bound by the acts of an agent if The agent had authority The principal ratifies the acts of the agent Authority A principal is bound by the acts of an agent if the agent has authority There are three types of authority Express Granted by words or conduct that Implied Authority to conduct a transaction includes Reasonably interpreted cause the agent to believe the principal desires her to act Authority to do acts that are reasonably necessary to accomplish it Apparent Principal can be liable for the acts of an agent who is not acting with authority if Principal s conduct causes a third party reasonably to believe that the agent is authorized Ratification and subagents Ratification If a person accepts the benefit of an unauthorized transaction or fails to repudiate it then He is as bound by the act as if he had originally authorized it Subagents Intermediary agent Someone who hires subagents for the principal When an agent is authorized to hire a subagent Principal is as liable for the acts of subagent as he is for the acts of regular agent Agents for liability for contracts Fully disclosed principal An agent is not liable for any contracts These notes represent a detailed interpretation of the professor s lecture GradeBuddy is best used as a supplement to your own notes not as a substitute Unidentified principal Third party can recover from either the agent or the principal Undisclosed principal Third party can recover from either the agent or the principal Third party is not bound to the contract with an undisclosed principal if Contract provides that the third party is not bound to anyone other than the agent Agent lies about the principal because she knows the third party would refuse to contract with him Unauthorized agent The principal is not liable and the agent is Principals liability for torts Employer is liable for a tort committed by its employee acting within the scope of employment or acting with the authority Two kinds of agents Employees Independent contractors Principal may be liable for the torts of an employee but generally is not liable for the torts of an independent contractor Employee or independent contractor Courts consider whether Principal supervises details of the work Principal supplies the tools and place of work Agents work full time for the principal Agents receive a salary or hourly wages Work is part of regular business of the principal Principal and agents believe they have employer employee relationship Principal is in business Negligent Hiring The principal is liable for the torts of an independent contractor if the principal has been negligent in hiring or supervising her Scope of Employement Principals are liable only for torts that an employee commits An employee is acting within the scope of employment if the act Is one that employees are responsible for Takes place during hours that employee is employed Is part of the principal s business Is similar to the one the principal authorized Is one for which the principal supplied the tools Is not seriously criminal Authorization An act is within the scope of employment if Expressly forbidden It is of the same general nature as that authorized It is incidental to the conduct authorized Abandonment The principal is liable For the actions of the employee that occur while the employee is at work Not for actions that occur after the employee has abandoned the principal s business Intentional Tort Principal is not liable for the intentional torts of an employee unless Employee is intended to serve some purpose of the employer Employer was negligent in hiring or supervising this employee Physical or non physical harm Physical torts Principal is liable for the negligent conduct of an employee that occurs within the scope of employment Nonphysical torts Principal is liable if the employee if the employee acted with express implied or apparent authority Agent s liability for torts Agents are always liable for their own torts even if the principal is also liable Principal and the agent are jointly and severally liable Injured party can sue either one or both Agents are always liable for their own torts even if the principal is also liable Principal and the agent are jointly and severally liable Injured party can sue either one or both