Agency: the five-step analysisAgency: el análisis en cinco pasos
The order in which to attack any agency fact pattern, from the chapter 1 cases, the practice quiz and the scenario tips.El orden para atacar cualquier problema de agency, a partir de los casos del capítulo 1, el quiz de práctica y los tips del escenario.
- Read the agreement firstPrimero lee el acuerdo: Engagement letter, employment contract, partnership agreement, board resolution: the parties' own document sets the rights before any default rule applies.The professor's favorite short answer. Students jump to the Restatement and forget the contract.
- Is there an agency relationship?¿Hay relación de agency?: Both sides assent, the agent acts on the principal's behalf, and the principal has the right to control. Labels do not decide; facts do. Employees, officers, general partners and lawyers are agents by the nature of the relationship. (R.3d Agency § 1.01)Independent contractors can still be agents for contract purposes even when respondeat superior does not reach them.
- Which kind of authority covers this act?¿Qué tipo de facultad cubre este acto?: Actual (express or implied) from the principal's manifestations to the agent; apparent from manifestations to the third party; inherent from the agent's position (president, CEO). Ask: to whom did the principal manifest, and what exactly did that manifestation cover? (R.3d Agency §§ 2.01–2.03)Apparent authority never comes from the agent's own statements. Permission for a small act (renew a deposit) does not stretch to a bigger one (cash it): Ames.
- Who is bound on the contract?¿Quién queda obligado por el contrato?: With actual or apparent authority the principal is bound as if it had acted itself. An agent who exceeds authority answers to the principal and, if the third party is left without a contract, may answer to the third party too.
- Who answers for the tort?¿Quién responde por el tort?: Two questions: (1) employee or independent contractor (right to control time, manner and method)? (2) within the scope of employment (hired to do it, incidental to it, or furthering the employer's business)? Fraud is a tort, so respondeat superior can matter in a deal gone wrong. (R.3d Agency §§ 2.04, 7.07)A frolic (substantial personal deviation) breaks the chain; a small detour does not.
- Did anything after the act change the result?¿Algo posterior cambió el resultado?: Ratification (with knowledge of the material facts; it relates back and can be inferred from acquiescence); estoppel (the principal's carelessness plus the third party's detrimental reliance); laches (unreasonable delay that prejudices the other side, at the court's discretion). (R.3d Agency §§ 2.05, 4.01–4.06)Delay alone is not laches; prejudice is an element. Ratification without knowledge of a material fact is not effective.
- What are the damages and who sues whom?¿Cuáles son los daños y quién demanda a quién?: Map every pair: principal v. agent (breach of duty, indemnity), third party v. principal (contract or tort), principal v. third party (conversion, rescission). Explain why the plaintiff chose that defendant (solvency, insurance, the easier theory).
How this shows up on the exam
The chapter scenarios and the exam essays are the same animal: a short story with several people wearing several hats (partner, employee, officer, buyer), one unauthorized or badly authorized act, and a call that asks who can recover from whom. Write the hats first, then run the checklist above for each pair of parties. Tell the story from each side (“as Rosa’s lawyer I would argue…”), because the professor rewards advocacy on both sides more than a single right answer.
The thirty-second version
Agency is consent plus control. Authority is what the principal manifested, measured from the point of view of whoever received the manifestation. Torts follow control and scope. Everything else (ratification, estoppel, laches) is a way the principal gets stuck after the fact.
Mexican contrast
In Mexico the question is almost always what the written power of attorney says (CCF art. 2554 and the categories of poderes). Here the written document matters first too, but conduct creates authority just as well, and apparent authority protects the third party much more strongly than any Mexican doctrine of apariencia.