Agency

1
Agency

• Chapter 17

2
Agency

• Relationship between two parties in which one
  party (agent) agrees to represent or act on
  behalf of another party (principal)
• Examples
• employer-employee
• independent contractor

3
Agency

• A fiduciary relationship that results when
  principal authorizes or consents to allow an
  agent to act on his or her behalf.
• fiduciary a person acting for the benefit of
  another, a duty of trust and confidence

4
Formation of Agency

• Written Agreement
• Oral Agreement (if performable in one year)
• Implied by conduct
• Estoppel- apparent authority
• actions of principal must imply authority
• (not actions of agent)
• reasonable person must believe agency exists.
• Implied by operation of law
• By ratification

5
Agency Relationships

• Employee
• One who works for, and receives payment from, an
  employer.
• Whose working conditions and methods are
  controlled by the employer.
• For whose acts and omissions occurring in the
  scope of employment the employer is liable.

6
Agency Relationships

• Independent Contractor
• One who does work for, and receives payment from,
  an employer.
• Whose working conditions and methods are not
  controlled by the employer.
• For whose acts and omissions the employer is not
  liable.

7
Employer-Employee Relationships

• Determine whether an employee or independent
  contractor by the following
• Direction and control the employer exercises over
  the details of work
• Who supplies tools used at workplace
• Degree of skill is required of the worker
• Duration of employment
• Method of payment

8
Employer-Employee Relationships

• Primary factor the IRS uses to determine whether
  an employee or independent contractor
• Direction and control the employer exercises over
  the details of work

9
Agents Duties to Principal

• Performance
• Notification
• Loyalty
• Obedience
• Accounting

10
Principals Duties to Agent

• Compensation
• Reimbursement
• Indemnification
• Cooperation
• Safe Working Conditions

11
Liabilities in Agency

• Principal is liable for agents contracts, if
  agency is disclosed
• Principal is liable for agents torts if agent in
  course and scope of employment

12
Liabilities in Agency

• Respondeat Superior -- the doctrine by which an
  employer or other principal is liable, along with
  the agent or employee, for any tort committed by
  the agent or employee while acting within the
  scope of their agency or employment.
• Does not apply if agent is on a frolic of his
  own

13
Liabilities in Agency

• Principal not liable for most criminal acts
  unless criminal activity was directed by
  principal (but are liable for intentional torts
  committed in scope of employment)

14
Termination of Agency

• Lapse of Time
• Purpose Achieved
• Occurrence of Event
• Mutual Agreement
• Revocation (unless coupled with interest)

15
Termination of AgencyBy Operation of Law

• Death or insanity
• (Statutory Durable Power of Attorney
• Authority continues after principal becomes
  disabled)
• Impossibility
• Materially changed circumstances
• Bankruptcy
• War

16
Agency

• End of Chapter 17