Clemson LAW 3220 - Chapter 14: Agency and the Employment Relationship

Unformatted text preview:

Ch 14 4 6 Chapter 14 Agency and the Employment Relationship Agency relationship 2 parties involved agent and principal 04 08 2015 Agent gets authority from principal to act on behalf of principal Principals will hire agents as a way to expand their business and act on their behalf without hiring full time employees Agents are cheaper in the long run and easily terminated in ways that employees cannot be Most common way agents get authority is the power of attorney Types of agents o Universal agent authorized to do everything o General agent like general managers Have authority to make necessary business decisions for it to run o Special agent given authority for a specific transaction Most common real estate agent o Gratuitous agents work for free typically seen in charitable organizations o Sub agents gets their authority from an agent Principal can forbid the use of sub agents Agency relationships are created through o Oral and or writing agreements Most common 95 o Ratification agent takes some action even though principal didn t give them authority but then says that action is okay o Estoppel usually created by words or actions of the principal If a 3rd person was present for you to not object to an agent assuming power you cannot later object to the agent relationship o Operation of law created typically in an emergency where necessities arise Types of authority o Actual type of authority principal gives to agent You re my agent to sell my house o Express what the principal gives to agent o Implied if someone s acting as a general manager they have implied authority to take whatever actions necessary even if not expressed explicitly o Apparent arises when the principal just stands by and doesn t object to the agent appearing to have the authority Both principal and agent have the duty to act in good faith o Principal must pay agent cooperate with principal and help them achieve whatever their task is o Agent must account for what they re doing financial accounting what business have you generated and what expenses have you incurred must remain loyal to principal even though an agent can work for more than one principal This means they must put the principal s goals before their personal ones 2 types of principals o Disclosed one that the agent makes 3rd parties aware of I m negotiating this deal on behalf of party a Principal is liable for potential breach of contract 3rd party can directly sue them o Undisclosed if agent doesn t tell the third party that they re acting on behalf of an agent Third party can only sue agent not principal if breach of contract occurs Agency relationship is voluntary o Can be terminated at any point by either party as long as they tell the other one o The principal must tell the parties the agent was negotiating with that the relationship is over so that they won t be found liable because of apparent authority How agencies are terminated o Relationships are often specified in the agreement to last for a specific amount of time will terminate if time is up o If either party dies the agency dies by operation of law o If the subject matter of the agreement is destroyed the o If either party goes bankrupt Principal or agent relationship agency is terminated is terminated If an agent is acting within the scope of their authority it creates a contract and tort liability for the principal Employee Versus Independent Contractor Independent contractor v employee how much control does the person in charge exercise on a day to day basis The more you control their actions the more it looks like they re an employee Independent contractor is typically not controlled by the person who hired them can set their own hours and workweek as long as they get their work done on time Typically don t have an office and provide their own skills training and tools Can work for as many people as they want Employee takes a lot of direction and control from whoever hired them has an office has a set work week and set hours Employer provides skills and tools needed for employees to do jobs Most employees only work for 1 employer Liability o Independent contractors cannot create any type of liability for the person who hired them this is because the person who hired them can t control the way they do their job so they shouldn t be held liable for their actions o Employees can create tort and contract liability for their employer Employment Law In US employment at will employee is working at will at the whim of their employers You can quit or be fired at any time and there s no continuing liability guaranteed afterwards o Only senior executives have employment agreements typically This doesn t protect them from being fired but if they re fired they get a lot of benefits 1 You re not supposed to be fired right before you re meant to get a bonus Courts won t give your job back but they ll make sure you re compensated 2 You re not supposed to be fired right before you re meant to retire Courts won t give your job back but they ll make sure you re compensated 3 Retaliatory discharge if you do something that s allowed by law like you realize your employer is cheating the tax system and you call the IRS you re not supposed to be fired If you are you re entitled to compensation Employee handbooks important because they include policies and procedure which might contain the firing policies Handbooks can create binding obligations on employees if there s procedural stuff in there the employer has to follow it If it s not followed then the contract is breached and the employee can sue for wrongful discharge These rules apply in the US If you hire people outside of the US it s hard because the law varies from country to country and you need to make sure you pay attention to their laws Rome Regulations in EU usually have laws that apply to all of the EU Tort liability independent contractor does not create this Agents and employees do create tort liability for principal and employer even if their actions weren t authorized as long as they re acting within their scope of authority Vicarious liability says that principal is liable for agent s actions if they were acting in the scope of their authority Negligent Hiring Another type of liability If you re an employer and you re hiring someone you have an obligation to check up on this person s past and qualifications to make sure they re fit for the job You also have an obligation to police their actions after they are hired and investigate


View Full Document

Clemson LAW 3220 - Chapter 14: Agency and the Employment Relationship

Documents in this Course
Exam 2

Exam 2

8 pages

Exam 2

Exam 2

8 pages

Chapter 6

Chapter 6

29 pages

CH 13

CH 13

9 pages

Ch5 Notes

Ch5 Notes

17 pages

Law Notes

Law Notes

15 pages

Load more
Download Chapter 14: Agency and the Employment Relationship
Our administrator received your request to download this document. We will send you the file to your email shortly.
Loading Unlocking...
Login

Join to view Chapter 14: Agency and the Employment Relationship and access 3M+ class-specific study document.

or
We will never post anything without your permission.
Don't have an account?
Sign Up

Join to view Chapter 14: Agency and the Employment Relationship 2 2 and access 3M+ class-specific study document.

or

By creating an account you agree to our Privacy Policy and Terms Of Use

Already a member?