Actions by E-Agents

Actions by E-Agents

An “e-agent” is a semi-autonomous computer program capable of executing specific tasks on behalf of a principal.

E-commerce uses e-agents to create contracts every day.

Liability Authorized & Unauthorized Acts

Liability Authorized Acts

If undisclosed Principal, no liability unless.

§ Principal expressly excluded.

§ Contract is a negotiable instrument.

§ Agent’s performance is personal.

§ 3rd party would have contracted if he knew the Principal’s identity.

Liability Unauthorized Acts

Unauthorized acts outside of Agent’s express, implied or apparent authority. If Agent has no authority, Principal is not liable, but Agent is liable.

Authorized Acts

Authorized Acts

Disclosed or partially disclosed Principal is liable to 3rd party if Agent acts within scope of authority.

Agent has no liability to 3rd P for disclosed Principal’s non-performance. (Agent may be liable if Principal is partially disclosed).

Case 32.1: McBride v. Taxman Corp. (2002).

Liability for Contracts

Principals are classified as:

§ Disclosed: identity known to 3rd P.

§ Partially Disclosed: 3rd P knows he is dealing with Agent, but doesn’t know Principal’s identity.

§ Undisclosed: 3rd party does not know he is dealing with an Agent, and Principal’s identity is totally unknown.

Emergency Powers & Ratification

Emergency Powers

Arises when:

§ Agent should protect Principal.

§ Agent cannot communicate with Principal.

Ratification

1. Agent must act on behalf of Principal.

2. Principal must affirm entire deal.

3. Principal must affirm before 3rd party withdraws from transaction.

4. Principal and 3rd party must have legal capacity to contract when Agent made the deal.

5. Principals must know all the material facts involved in the transaction.

Apparent Authority and Estoppel

Apparent Authority and Estoppel

Principal, by either word or act, causes 3rd party to reasonably believe that Agent has authority to act for Principal.

If 3rd party changes legal position by relying on Principal’s representations, Principal is estopped from denying Agent had authority to contract.

Implied Authority

Implied Authority

Inferred or conferred by custom, Agent’s position or what is reasonably necessary to carry out express authority.

What the Agent reasonably thinks the Principal means.

Express Authority

Express Authority

Can be oral or written.

“Equal Dignity Rule.”

§ If law requires written contract, Agent’s authority must be in writing. Failure to comply with the rule renders contract voidable. 

§ Exceptions:

•    Officer acting for Corporation.

•    Agent acts in Principal’s presence.

Power of Attorney (ordinary v durable).

Scope of Agent’s Authority

Scope of Agent’s Authority

Principal is liable for acts entered into by Agent when she gives Agent either actual or apparent authority:

§  Actual Authority: express or implied.

§  Apparent Authority: estoppel, emergency and ratification.

Agency, Liability to Third Parties and Termination

Introduction

ü Is Principal liable for contracts entered into by his Agent?

ü Is Agent liable for contracts entered into for Principal?

ü When is a third party liable to Principal and to Agent?

ü When is Principal liable for the torts of his Agent?

ü When is Agent liable for torts committed while working for Principal?