blaw 17
How many parties are there to an agency contract?
(2):principle and agent
Termination by act of the parties
1)LAPSE OF TIME-when an agency agreement specifies the time period during which the agency relationship will exist, the agency ends when that time period expires. If no definite time is stated, then the agency continues for a reasonable time and can be terminated at will by either party. 2)PURPOSE ACHIEVED-if an agent is employed to accomplish a particular objective, such as the purchase of stock for a cattle rancher, the agency automatically ends after the cattle have been purchased. If more than one agent is employed to accomplish the same purpose, such as the sale of real estate, the first agent to complete the sale automatically terminates the agency relationship for all the others. 3) OCCURRENCE of a specific event-when an agency relationship is to terminate on the happening of a certain event, the agency automatically ends when the event occurs. If Posner appoints Rubik to handle her business affairs while she is away, the agency terminates when Posner returns. 4)MUTUAL AGREEMENT-the parties to an agency can cancel their contract by mutually agreeing to terminate the agency relationship. 5)TERMINATION BY ONE PARTY-as a general rule, either party can terminate the agency relationship *renunciation is by the agent, revocation is by the principal*. Although both parties have the power to terminate the agency, they may not possess the right. Wrongful termination can subject the canceling party to a suit for breach of contract. EXAMPLE: Rawlins has a one-year employment contract with Munro to act as an agent in return for $65,000. Although Munro has the power to discharge Rawlins before the contract period expires, if he does so, he can be sued for breaching the contract because he had no right to terminate the agency.
Notice of Termination
1.By act of the parties-Notice to third parties is required when an agency is terminated by act of the parties. Direct notice is required for those who have previously dealt with the agency;constructive notice will suffice for all other third parties. 2.By operation of law-Notice to third parties is not required when an agency is terminated by operation of law.
Whistleblower statute
A person who tells the public or someone in authority about alleged dishonest or illegal activities occurring. This statute protects you.
Disclosed principal
A principal whose identity is known to a third party at the time the agent makes a contract with the third party. EXAMPLE: Walgreens leased commercial property to operate a drugstore at a mall owned by Kedzie Plaza Associates. A property management company, Taxman Corporation, signed the lease on behalf of the principal, Kedzie. The lease required the landlord to keep the sidewalks free of snow and ice, so Taxman, on behalf of Kedzie, contracted with another company to remove ice and snow from the sidewalks surrounding the Walgreens store. When a Walgreens employee slipped on ice outside the store and was injured, she sue Walgreens, Kedzie, and Taxman for negligence and ended up settling her claims with the other defendants except Taxman. Because the principal's identity (Kedzie) was fully disclosed in the snow-removal contract, however, the Illinois court ruled that the agent, Taxman, could not be held liable. Taxman did not assume a contractual obligation to remove the snow but merely retained a contractor to do so on behalf of the owner.
Partially disclosed principal
A principal whose identity is unknown by a third party, but the third party knows that the agent is or may be acting for a principal at the time the agent and the third party form a contract. EXAMPLE: Sarah has contracted with a real estate agent to sell certain property. She wishes to keep her identity a secret, but the agent makes it perfectly clear to potential buyers of the property that the agent is acting in an agency capacity. In this situation, Sarah is a partially disclosed principal.
Undisclosed principal
A principal whose identity is unknown by a third person, and the third person has no knowledge that the agent is acting for a principal at the time the agent and the third person form a contract. The agent is also liable as a party to the contract.
Agency
A relationship between two parties in which one party (the agent) agrees to represent or act for the other (the principal).
Fiduciary
As a noun, a person having a duty created by his or her undertaking to act primarily for another's benefit in matters connected with the undertaking. As an adjective, a relationship founded on trust and confidence. (Put someone elses interests ahead of your own)
Apparent authority
Authority that is only apparent, not real. In agency law, a person may be deemed to have had the power to act as an agent for another party if the other party's manifestations to a third party led the third party to believe that an agency existed when, if fact, it did not. EXAMPLE: Bailey is a traveling salesperson with the authority to solicit orders for a principal's goods. Because she does not carry any goods with her, she normally would not have the implied authority to collect payments from customers on behalf of the principal. Suppose that she does accept payments for Corgley Enterprises, however, and submits them to the principal's accounting department for processing. If the principal does nothing to stop Bailey from continuing this practice, a pattern develops over time, and the principal confers apparent authority on Bailey to accept payments form Corgley.
Duties of the principal (common law duties)
COMPENSATION-except in a gratuitous agency relationship, the principal must pay the agreed-on value for an agent's services. REIMBURSEMENT & INDEMNIFICATION-the principal must reimburse the agent for all funds disbursed at the request of the principal and for all funds that the agent disburses for necessary expenses in the course of reasonable performance of his or her agency duties. COOPERATION-a principal must cooperate with and assist an agent in performing her or his duties. SAFE WORKING CONDITIONS-a principal must provide safe working conditions for the agent-employee. EXAMPLE: Now days if Walgreens sells aspirin online its a breaching of duty of cooperation because drugs still can be sold in that area.
Determining employee status
Courts are frequently asked to determine whether a particular worker is an employee or an independent contractor, because employees get more benefits than independent contractors. 1)How much control can the employer exercise over the details of the work?-if an employer can exercise considerable control over the details of the work, this would indicate employee status. 2)Is the worker engaged in an occupation or business distinct from that of the employer?-if so, this points to independent-contractor status. 3)Is the work usually done under the employer's direction or by a specialist without super-vision-if the work is usually done under the employer's direction, this would indicate employee status. 4)Does the employer supply the tools at the place of work?-if so, this would indicate employee status. 5)For how long is the person employed?-if the person is employed for a long period of time, this would indicate employee status. 6)What is the method of payment-by time period or at the completion of the job?-payment by time, such as once every two weeks would indicate employee status. 7)What degree of skill is required of the worker?-if little skill is required, this may indicate employee status.
Attorney in fact
Just another world for agent.
Respondeat Superior
Latin for "let the master respond." A doctrine under which a principal or an employer is held liable for the wrongful acts committed by agents (tort) or employees while acting within the course and scope of their agency or employment. EXAMPLE: Joel beats up Donna because she wont allow him to put his cookie products on a high shelf (intentional tort) the principal is still liable, even if he would have said, "Please don't beat up people." Determining the scope of employment: 1)Whether the employee's act was authorized by the employer. 2)The time, place, and purpose of the act. 3)Whether the act was one commonly performed by employees on behalf of their employers. 4)The extent to which the employer's interest was advance by the act. 5)The extent to which the private interests of the employee were involved. 6)Whether the employer furnished the means of instrumentality (for example, a truck or a machine) by which the injury was inflicted. 7)Whether the employer had reason to know that the employee would do the act in question and whether the employee had ever done it before. 8)Whether the act involved the commission of a serious crime.
Agency by agreement
Most agency relationships are based on an express or implied agreement that the agent will act for the principal and that the principal agrees to have the agent so act. An agency agreement can take the form of an express written contract or be created by an oral agreement. EXAMPLE: Reese asks Cary, a gardener, to contract with others for the care of his lawn on a regular basis. Cary agrees. An agency relationship is established between Reese and Cary for the lawn care. EXAMPLE: An agency agreement can also be implied by conduct. A hotel expressly allows only Boris to park cars, but Boris has no employment contract there. The hotel's manager tells Boris when to work, as well as where and how to park the cars. The hotel's conduct amounts to a manifestation of its willingness to have Boris park its customers' cars, and Boris can infer from the hotel's conduct that he has authority to act as a parking valet. It can be inferred that Boris is an agent-employee for the hotel, his purpose being to provide valet parking services for hotel guests.
Agency by ratification
On occasion, a person who is in fact not an agent (or who is an agent acting outside the scope of her or his authority) may make a contract on behalf of another (a principle). If the principal approves that contract by word or by action, an agency relationship is created by ratification. EXAMPLE: Amy doesn't have authority to sell Paul's factory. However if Paul says, "Amy, I ratify this contract," then it's valid and okay.
Duties of the agent (fiduciary duties)
PERFORMANCE-the agent must use reasonable diligence and skill in performing her or his duties or use the special skills that the agent has represented to the principal that the agent possesses. NOTIFICATION-the agent is required to notify the principal of all matters that come to his or her attention concerning the subject matter of the agency. LOYALTY-the agent has a duty to act solely for the benefit of the principal and not in the interest of the agent or a third party. OBEDIENCE-the agent must follow all lawful and clearly stated instructions of the principal. ACCOUNTING-the agent has a duty to make available to the principal records of all property and funds received and paid out on behalf of the principal.
Scope of authority
Power delegated to an agent under an agency agreement for carrying out the principal's business or instructions.
Agency by operation of law
The agency relationship is based on a social duty (such as the need to support family members) or formed in emergency situations when the agent is unable to contact the principal and failure to act outside the scope of the agent's authority would cause the principal substantial loss.
Agency by estoppel
When a principal causes a third party to believe that another person is his or her agent, and the third party deals with the supposed agent, the principal is "estopped to deny" the agency relationship. In such a situation the principal's actions create the appearance of an agency that does not exist. EXAMPLE: John (boss) pays Liz (sales person) to sell cell phones. John always talks about Mary (a former employee) and how good she was with cell phones. John is liable because he created the impression that Mary still worked for him.
