To the extent an agent has the power to bind, the Agent's conduct is attributed to the principal. 

1. Actual Authority

2. Apparent Authority

3. Estoppel

4. Inherent Agency

5. Ratification

Actual Authority can be created by oral or written words or conduct by the principal which, reasonably interpreted, causes the agent to believe that the principal desires him to act on the principal's account.

Creation:

-Objective manifestation by Principal

-Followed by Agent's reasonable interpretation of the manifestation

- Leads Agent to believe he is authorized to act for Principal.

Apparent Authority

Apparent authority binds the Principal to contracts with third parties if a manifestation of the principal reached the third party and caused the third party to reasonably believe the apparent agent was authorized to act on behalf of the apparent principal.

Creation:

- Manifestation by apparent principal

- Reaches Third party

- Causes third party to reasonably believe Apparent Agent authorized to act for the Apparent principal

Under Estoppel theory, Principal is liable to third parties for contracts made by A when:

- No manifestation of Principal reaches the third party; and - The transactions that were purported to be done on his/her account; AND

-Third party relied/changed his legal position on the belief that the transactions were done on P's account; and EITHER:

- the principal intentionally caused the belief; OR

-Knew of the belief, the Principal took no reasonable steps to inform the Third party of the true facts

Under the inherent agency power, neither actual nor apparent authority and estoppel does not apply

- Agent is the general agent of Principal (authorized to conduct a series of transactions involving a continuity of a service)

- A is acting in the interest of P

- Agent does acts which are usual and necessary with regard to the authorized transaction

When Principal affirms a previously unauthorized act of Agent in contract, P is bound to the third party under the contract.

Elements:

- Agent acted on behalf of Principal in a transaction with third party; and

- Actual, apparent, estoppel, inherent does not apply

-Principal existed and had capacity to contract at the time of the transaction; and

-at ratification, third party must not have withdrawn; and

- Principal, with knowledge of material facts, manifested (by words or conduct) that the intended to treat the unauthorized transaction as authorized

Factors in Determing Servant Status:

- Extent of Principal's control over the Agent's performance

- Distinct occupation or business

- Local Custom

- Degree of Skill required

- Who supplied tools and supplies

- Length of relationship

- Method of payment (hourly= employee, by job = indy contractor)

- Whether the work is part of employee's business

- The way the parties view their relationship

- Whether the Principal is engaged in the business

Servant's conduct is within scope of employment if:

- The work involved is of the type the servant is employed to perform

- The work occurs substantially within the authorized time and space limits.

- The Agent's actions are actuated, in part, by a purpose to serve the master

- If intentional force used by the Servant against another, the use of force is not unexpected by the Master

Travel Rules:

- Commuting to and from work is generally not within the scope of employment

- Exception: Errand for the Master during the commute (i.e pick up dry cleaning) = within scope of employment

- If the Master controls the route, and/or pay travel expenses= within the scope of employment

Detour = temporarily detoured for a personal reason, (i.e, going to drive through while on the Master's business) while still serving the Master's purpose -- must be actuated, in some part, by desire to serve the Master = within the Scope of Employment.

Frolic = outside time/space limits set by the Master; deviating poses risk of harm = outside the Scope of Employment.

Negligence

Negligence of apparent agent/agent by estoppe:

- principal manifests that Agent is his agent/servant

- Third party relies on the representations regarding the Agent skills

-Third party is injured

-Then the Principal is vicariously liable to the third party.

Misrepresentation: Principal is vicariously liable for the Agent's tort of misrepresentation if:

- Agent makes a tortious misstatement (intentional or negligent)

- The misstatement is within the Agent's authority (actual, apparent, inherent agency power)

- Third party relies on the misstatement and suffers harm.

Borrowed servant doctrine: The special master (the one borrowing the servant) is vicariously liable for the borrowed servant's tort if:

- the General Master (the one lending the servant) allowed the employee to work for the special master; AND

- At time of tort:

- The special master had the right to control the servant's work

- The General Master had no significant right of control.

Duty of Loyalty: Hallmark characteristic of Agency status.

-Agent may not benefit from his/her efforts on behalf of the Principal

-Agent must safeguard Principal's confidential info, may not use the information to benefit anyone other than the Principal

-Unless otherwise agreed, the Agent may not compete with the Principal on any matter within scope of the agency.

-Unless otherwise agreed, A may not act for anyone with interests conflicting with P

- Agent may not be other party in transaction without the Principal's consent.

Duty to Act within Authority/

Duty to Obey instructions

Duty to act within authority: The agent has no right to act outside of scope of authority. If Agent has reason to doubt his/her scope of authority, the Agent must consult with the Principal prior to acting.

Duty to Obey: Except where the Principal's instructions require the Agent to take an improper act. This duty cannot be removed by contract.