Slide 1Agency RelationshipsEmployer-Independent Contractor RelationshipsDetermining Employee Status: Criteria Used by the CourtsEmployer-Independent Contractor RelationshipsHow Agency Relationships Are FormedAgency by AgreementAgency by RatificationAgency by EstoppelAgency by Operation of LawDuties of Agents and PrincipalsDuties of Agents and PrincipalsDuties of Agents and PrincipalsAgent’s AuthorityAgent’s AuthorityAgent’s AuthorityAgent’s AuthorityAgent’s AuthorityAgent’s AuthorityAgent’s AuthorityAgent’s AuthorityAgent’s AuthorityLiability for ContractsLiability for ContractsLiability for ContractsLiability for ContractsLiability for ContractsLiability For Torts and CrimesLiability For Torts and CrimesLiability For Torts and CrimesLiability For Torts and CrimesLiability For Torts and CrimesLiability For Torts and CrimesLiability For Torts and CrimesLiability For Torts and CrimesHow Agency Relationships Are TerminatedHow Agency Relationships Are TerminatedHow Agency Relationships Are TerminatedHow Agency Relationships Are Terminated© 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.© 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.Business Law Today 10th Ed.Text and Summarized CasesDiverse, Ethical, Online and Global EnvironmentRoger LeRoy MillerGaylord JentzChapter 23 Agency Relationships in BusinessGoodluz/iStockphoto.com© 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.AGENCY RELATIONSHIPS•Agency is a “fiduciary” relationship based on trust and confidence. •Employer-Employer Relationships.Normally, all employees who deal with third parties are agents.Key is CONTROL.© 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.EMPLOYER-INDEPENDENT CONTRACTOR RELATIONSHIPS•Employers have ‘no control’ over the details of a contractor’s work performance. © 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.DETERMINING EMPLOYEE STATUS: CRITERIA USED BY THE COURTSYesNoIs there a great degree of skill required?YesNoIs the worker paid at the end of the job?NoYesHas the worker been employed a long time?NoYesDoes Employer provide the tools?NoYesIs the work usually done under Employer’s supervision?YesNoIs the worker engaged in an occupation or business distinct from Employer?NoYesDoes the Employer exercise a great degree of control over the details of the work?I.C. E’eeA “Yes” Tends to Show Employee Status© 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.EMPLOYER-INDEPENDENT CONTRACTOR RELATIONSHIPS•Criteria Used by the IRS.•Employee Status and “Works for Hire.”Any copyrighted work created during scope of employment is owned by employer.© 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.•Generally, agency relationships :–Are consensual.–Require no consideration.–Require principal to have contractual capacity (agent does not).–Can be created for any legal purpose.HOW AGENCY RELATIONSHIPSARE FORMED© 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.AGENCY BY AGREEMENT• Formed through express consent (oral or written) or implied by conduct.© 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.AGENCY BY RATIFICATION•Principal either by act or by agreement ratifies conduct of a person who is not in fact an agent.© 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.AGENCY BY ESTOPPEL•Principal causes a third person to believe that another person is the Principal’s Agent, and the third person acts to her detriment in reasonable reliance on that belief.© 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.AGENCY BY OPERATION OF LAW•Agency based on social duty is formed in certain situations when the Agent is unable to contact the Principal.–Necessaries.–Emergencies.© 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.DUTIES OF AGENTS AND PRINCIPALS•Agent’s Duties to the Principal.Performance: implied condition to use reasonable diligence and skill. If agent fails, possible breach of contract. Gratuitous Agent: only liable for