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Agency relationship
- Principal
- Agent
- Third party
consentual relationship, usually contractual
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Agent
Enters into contracts on behalf of the principal, so usually not liable
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When Agents commit torts
Third Party can sue the principal under the doctrine of respondeat superior
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Agent's authority
- express
- implied
- apparent
- (ratification)
- (by operation of law)
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Apparent authority
principal gives the appearance that a person is his agent when he isn't.
- e.g. fired a past agent but the third party doesn't know about it
- view it from reasonable Third Party reliance
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Ratification
- express-tell agent it was ok, despite the fact they acted outside their authority
- Implied-keep the money etc. when you know it comes from unauthorized conduct
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By operation of Law
- Necessaries-you become the agent for your spouse and children
- Emergency- should try to notify the principal, then act reasonably under the circumstances, if you don't you're liable
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Principal is liable for the agent when:
agent acts under the scope of his authority
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Independent contractor
- The employer has a relative lack of control
- employer is not liable if the independent contractor hurts a third party
unless it is a non-delegable duty
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non-delegable duty
- employer is liable even if they hired an I.C.
- landlord liable for fixing stairs, city fixing road, railroad
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Fiduciary duties of principal
- Duty of Compensation
- Reimbursement and Indemnification
- Cooperation
- Safe working conditions
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Duty of Compensation
The principal has a duty to compensate the agent for services provided unless the parties have agreed that the agent will act gratuitously
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Reimbursement and Indemnification
The principal has a duty to reimburse or indemnify the agent for any authorized expenditures or any losses the agent incurs in the course of working on behalf of the principal.
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Cooperation
The principal must assist the agent in the performance of his or her duties and cannot interfere with the reasonable conduct of the agent.
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Safe Working Conditions
The principal has a duty to ensure safe working conditions and to warn the agent if the principal is aware of any potential danger.
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Fiduciary duties of the Agent
- Loyalty
- Notification
- Obedience
- Accounting
- Performance
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Loyalty
The agent has a responsibility to act in the best interest of the principal; this duty is important because the agency relationship is founded on trust.
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Notification
The agent must notify the principal of any relevant information in a timely manner.
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Obedience
The agent must follow the lawful instruction and direction of the principal.
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Accounting
The agent must keep an accurate account of the transactions made on behalf of the principal and provide the accounting information to the principal on request.
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Performance
The agent must perform the duties as specified in the agency agreement with reasonable skill, care, and professionalism.
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Principal's rights and remedies
- Constructive Trust
- Avoidance
- Indemnification
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Agent's rights and remedies
- Tort and Contract Remedies
- Demand for an Accounting
- Specific Performance
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