Welcome to Assignment 11
Agency law governs the relationship between principals (people who authorize others to act for them) and agents (people who act on behalf of principals). This is the backbone of how insurance companies operate — every policy sold by an agent, every claim handled by an adjuster, and every contract negotiated on behalf of an insurer involves agency law.
Exam Alert!
Key exam topics: The 3 methods of agency creation (appointment, estoppel, ratification), actual vs. apparent authority, the 5 agent duties (loyalty, obedience, care, accounting, information), respondeat superior, and the employee vs. independent contractor distinction.
What You Will Learn
1. How agency relationships are created by appointment, estoppel, and ratification
2. The difference between actual authority (express and implied) and apparent authority
3. The 5 duties an agent owes a principal and the 4 duties a principal owes an agent
4. How agency relationships are terminated
5. Third-party liability rules for disclosed, partially disclosed, and undisclosed principals
6. Respondeat superior and the employee vs. independent contractor distinction
Assignment Parts
Agency Creation
The 3 methods of creating an agency: appointment, estoppel, and ratification. Key definitions, capacity requirements, and the Statute of Frauds.
Authority
Actual authority (express and implied), apparent authority, ratification, scope of authority, duty to ascertain authority, and delegation rules.
Duties, Liability & Termination
Agent's 5 duties, principal's 4 duties, remedies, third-party liability, respondeat superior, employee vs. independent contractor, and termination.
Quick Reference Summary
3 Agency Creation Methods
Appointment (express), Estoppel (third-party belief), Ratification (after-the-fact approval).
Actual vs. Apparent Authority
Actual = really given (express or implied). Apparent = third party's reasonable belief.
5 Agent Duties
Loyalty, Obedience, Reasonable Care, Accounting, Information. Memory trick: LORCA.
4 Principal Duties
Honor employment period, Compensation, Reimbursement (expenses), Indemnity (losses).
Respondeat Superior
Employer liable for employee torts within scope of employment. Does NOT apply to independent contractors (usually).
3 Types of Principals
Disclosed (identity known), Partially disclosed (exists but unknown), Undisclosed (hidden).