Exam 29: Relationship With Third Parties

Unless otherwise agreed, an agent making a contract with actual or apparent authority on behalf of an unidentified principal is a party to the contract.

Ratification may relate to acts that have exceeded the authority granted to an agent.

When is a principal liable for her own conduct in tort involving the use of agents?

The principal may ratify either the entire contract or the part that is advantageous to the principal.

Under the Second Restatement, except in cases of death or incapacity, or where the performance of an authorized act becomes impossible, actual notice of termination of agency is required to the third party if she is one:

Paul is a truck driver who owns his own truck and delivers loads to various companies for nine months out of the year. For the hard winter months, Paul goes to Key West to "put his feet in the sand." One evening while delivering a load for Emblem Helicopter Parts Co., Paul got into a "little scuffle" with a rowdy trucker who was giving Nell, a waitress at the DewDrop Inn Cafe, a hard time. Paul knocked out five of "Rowdy's" teeth. Rowdy is suing Paul and Emblem for his injuries. Discuss whether Rowdy will win against Emblem on the issue of: (a) respondeat superior and (b) unauthorized acts of agents.

An agent acts for a(n) __________ principal when the agent appears to be acting on her own behalf and the third person with whom she is dealing has no knowledge that she is an agent.

The doctrine of __________ is the basis for an employer's liability for an unauthorized tort committed by an employee within the scope of employment.

Arthur is authorized to collect accounts for Peter. Peter dies, and there is no notice given to Theresa, who pays Arthur, as she has done in the past. Under the rules of the Third Restatement and the Uniform Durable Power of Attorney Act, if Arthur absconds with the money, Theresa will not have to pay again.

A subagent owes a fiduciary duty to both the agent and to the principal.

A person who undertakes to make a contract on behalf of another person gives an implied warranty that he is in fact authorized to make the contract on behalf of the person he purports to represent.

Identify three ways an agent may agree to become liable on a contract between the principal and the third party.

A person may ratify a prior unauthorized act and may later revoke the ratification.

The liability of an employer under the doctrine of respondeat superior is limited to wrongdoing by the employee in the scope of his employment.

Frank, acting as a promoter for Garleen Co., a corporation not yet in existence, makes a contract with Towne Supplies. When Garleen Co. is formed, it may:

Paul, acting without authority, makes a contract with Ed, supposedly on behalf of Shawna. Shawna may ratify the contract, even if Ed loses contractual capacity before she ratifies the contract.

To effect a ratification, the principal must manifest an intent to do so with knowledge of all material facts concerning the transaction.

An agent may agree to become liable on a contract between a principal and a third party in all but which of the following ways?

Name the two basic types of authority with regard to agents and explain the difference between them.

A principal's intention to permit the agent to delegate granted authority may only be gathered from the express authorization of the principal.