Fair Use Exception Educational Purposes Created by Pamela S Evers Assoc Prof UNCW for Educational Purposes 2001 w updates Contract remedies for breach of fiduciary duty and performance Can sue in tort libel slander trespass deceit fraud Constructive trust theory For money property Agent steals from Principal Avoidance of contract if Agent doesn t do as told Indemnification agent protects Principal Right to compensation reimbursement indemnification and cooperation Agent can withhold performance and demand an accounting Agent can recover damages for past services and future damages By agreement Agreed term of relationship ends Agreed purpose e g house sale is achieved Mutual agreement Agency at will principal terminates agency Note if one party s departure from relationship violates the agreement the termination is wrongful for which the remedy is damages By inability to perform If agency requires license and Agent or Principal loses the license agency ends Bankruptcy of Agent or Principal ends agency if the bankruptcy affects ability to perform Death incapacity of Principal or Agent Disloyalty of Agent Changed circumstances Destruction of subject matter change of law Once agency ends Agent has no authority to bind Principal Principal s duty to indemnify Agent continues For expenses liability during agency Note Agent s duty of confidentiality continues indefinitely Some agency relationships are irrevocable Example if Agent has power coupled with an interest e g interest in land to be sold only the Agent can terminate the agency Principal has neither power nor right to terminate Is Principal liable for contracts entered into by Agent Is Agent liable for contracts entered into for Principal When is a third party liable to Principal and to Agent When is Principal liable for the torts of Agent When is Agent liable for torts committed while working for Principal Generally Agent is not liable for contracts made on behalf of fully disclosed Principal However a third party can recover from either Agent or Principal if Principal is only partially disclosed or undisclosed Nat l Realtors Association HQ Washington DC Principal s liability for Agent s contract with a third party depends on whether Agent s actions contracts representations were authorized or unauthorized by Principal In general Principal is liable to 3rd party for contracts made by Agent if Agent acts within scope of authority Unauthorized acts are acts outside of Agent s express implied or apparent authority If Agent has no authority Principal is not liable but Agent alone is liable Manager Cabella s Sidney NE General Rule Agent is liable for his her crimes Principal is not Unless Principal authorized or participated in crime Negligent hiring or supervision theories may be applicable to create Principal s liability Some jurisdictions hold Principal liable for Agent s crimes if Principal violated statute A person is always liable for his or her own torts To determine whether a Principal also is liable for Agent s tortious conduct first determine whether worker is employee or independent contractor Liability Analysis Principal Generally Independent Contractor Not Liable unless strict liability Outside CSE P Not Liable Worker Employee Factors Within CSE P Liable Course and Scope of Employment Agent is liable to 3rd party for his own torts Principal also may be liable for Agent s torts if they result from Principal s own tort Principal s authorization of tort Agent s unauthorized but fraudulent conduct made within scope of agency An employment relationship Let the master answer Theory of liability that applies only to EmployerEmployee relationships master and servant Principal Employer Master is vicariously liable for Agent Employee Servant s negligent torts committed within the Agent s course and scope of employment Facts at construction site an excavator bucket disconnected fell and crushed an employee of the construction company What questions arise How could an employer prevent this type of lawsuit Principal liable for intentional torts committed with the scope of employment Employee is a tortfeasor as well Employer is liable for Employee s acts which Employer knew or should have known the Employee had a propensity to commit negligent hiring or supervision What were the facts What was the issue What did the court hold and why reasoning How should an employer prevent this type of lawsuit What were the facts What was the issue What should the court hold and why How should an employer prevent this type of lawsuit General rule Principal Employer is not liable for acts of independent contractors because Principal Employer has no right to control Independent Contractor is liable for his her own torts Exception hazardous activities Train derailment with fuel spill If Agent is authorized by Principal to hire subagents Principal is liable for the acts of the subagent If Principal undisclosed Agent is responsible for wages of subagents and Principal liable for torts of subagents Hourly worker at spinning mill Port Commissioner Port of LA Intelligent Agents autonomous or semiautonomous internet programs that interact with people or other programs to execute specific tasks including searching ordering and delivery of goods via point and click electronic contracts on the internet Generally intell agents have at least apparent authority to act for and bind Principal who is estopped from denying an electronic contract Let s Test Your Agency IQ A realtor is the typical agent When is a realtor your employee Is a tavern the agent of a liquor distributor Is a bartender an agent Employee When is a person who delivers mail an When is a plumber an Employee Agent agent An independent Independent contractor contractor May the software engineer take his talents along with confidential information about his employer to a new employer May the accountant refuse to work for a particular client of the Accounting Company if she doesn t like the client True A False B An agent is always liable for his own torts The doctrine of respondeat superior means that a principal is liable for torts committed by employees acting within the course and scope of employment If an agent contracts for a legally existing and competent principal but lacks authority to enter contracts the principal is not bound True A False B A principal is never liable for an independent contractor s torts Apparent authority arises if communications by principal to third party creates
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