Topic 7 : Agency (LOWEST SCORING ORANGE)

Employer - Independent Contractor

Generally not responsible for the actions of an independent contractor. Have no control on work done. Never agency here!

Employer – Employee

o   Control the actions of your employee.

§  Always an agency relationship if your employee works with third parties.

Doctrine of Respondeat Superior

Employer/Principal responsible for harm caused to third parties by agent/employee if it occurred in the scope of employment.

Are you liable when your agent is negligent?

YES

Detour (Doctrine of respondeat superior)

Still on the job

Frolic (respondeat superior)

Blew off job

When and is an employer liable for an intentional tort?

Only responsible if they knew it could/would happen.

Agency by agreement

A legal relationship established when a principal (one person) grants authority to an agent (another person) to act on their behalf.

Agency ratification

o   A principle approves unauthorized act of an agent after it has occurred, making the act binding as if it had been authorized from the beginning.- When someone who is not your agent makes a deal on your behalf and brings it to you. If you ratify it, you built a deal.

Agency by Operation Law

o   An agency that occurs not because of agreement but situationally. Ex. Death

Emergency situation with an agent

§  The agency steps into a situation that is beyond the scope of their authority to prevent a principal's substantial loss.

Agency by estoppel

o   Principal cannot deny an agency relationship if their actions created the impression that another person was their agent, and a third party reasonably relied on that impression to their detriment.

WHO can give the appearance of agency by estoppel?

THE PRINCIPAL ONLY.

Performance - Duties of Agent to Principal

Fulfill duty with reasonable care and skill.

Notification - Duties of Agent to Principal

Requires the agent to inform the principal of all material facts that could affect the agency.

Loyalty - Duties of Agent to Principal

A core fiduciary duty that requires an agent to act solely in the principal’s best interest, placing the principals needs about their own.

Obedience - Duties of Agent to Principal

o   Agent to follow the principal’s lawful and reasonable instructions within the scope of the agency relationship.

Accounting - Duties of Agent to Principal

Requires the agent to keep accurate financial records and account for all the money and property they handle on behalf of the principal.

Compensation ( Duties of principal to agent (1^st))

Pay the agent

If the principal and agent don’t agree on a pay what happens?

Customary Compensation

Gratuitous Agency

Not gratuitous unless you agree to do it for free, If you do it for free, it’s not a contract. The only duty is not to be negligent.

Reimbursement

If someone is your agent, they shouldn’t have to come out of pocket.

Indemnification

o   – Judgment from a lawsuit against the agent. When your agent has got sued. There is a judgment against them for something you did. You pay them back the lawsuit.

Cooperation - Duties of principal to agent (2^nd)

Parties to work together in good faith to achieve the agency’s goals, meaning the principal must not hinder the agent’s performance and the agent must assist the principal as needed.

Exclusive Agency

If principal gives the agent to exclusive territory to sell. Principal cannot compete with agent or allow another agent to compete. You can’t compete or give the territory to someone else.

Duties of Principal to Agent (3^rd)

Safe working conditions

Revocation ·         Ending the relationship – Act of Parties

PRINCIPAL terminates the agency agreement.

Renunciation ·         Ending the relationship – Act of Parties

AGENT terminates the agency agreement.

·         Power of attorney

o   Express authority given from the principal to the agent to do actions on the principal's behalf.

o   Has to be in writing.