Chapters 33 34 35 36 37 38 39 40 48 49 52 Chapter 33 34 Agency the fiduciary relationship that arises when one person consents to have another act on his behalf and subject to his control and the other consents to do so Agency Relationship the association between one party and an agent who acts on behalf of that party Fiduciary a person who has a duty to act primarily for another person benefit Agent one authorized to act for and on behalf of a principal Principle one who hires an agent to represent him or her Expressed agency agency formed by making a written or oral agreement most common type Power of attorney document giving an agent authority to sign legal documents on behalf of the principle Durable power of attorney power of attorney indented to continue to be effective or to take effect after the principle has become incapacitated Agency by implied authority agency formed by implication through the conduct of the parties Agency by estoppel apparent agency agency formed when a principle leads a third party to believe that another individual serves as his or her agent but the principle had made no agreement with the so called agent Agency by ratification agency that exists when an individual misrepresents himself as an agent for another party and the principle accepts tor ratifies the unauthorized act Principal agent relationship exists when an employer hires an employee to enter into contracts on behalf of the employer most basic type of relationship Employer employee relationship exists when an employer hires an employee to perform some sort of physical service Employer independent contractor relationship exists when an employer hires persons other then employees to conduct certain tasks Gratuitous agent on who acts without consideration that is such an agent is not paid for his or her services Disclosed principal a principal whose identity is know to a third party The third party is aware that the agent is making an agreement on behalf of the principle Partially disclosed principal a principle whose identity is not known by a third party although the third party is aware that the agent is making an agreement on behalf of a principle also called unidentified principle Undisclosed principal a principle whose existence is not known by a third party that is the third party does not know that an agent is acting on behalf of a principle Respondeat superior Latin for let the superior speak the principle by which liability for harm caused by an agent employee is held by the principle employer Authorized acts these are acts within the scope of the agent s authority Unauthorized acts these acts go beyond the scope of the agent s authority Vicarious Liability Liability assigned without fault for any harm the agent employee causes while working for the principal Agency relationshipsCan only be created for lawful purposes Almost anyone can act as an agent however an individual who doe not have contractual capacity such as a minor cannot hire an agent to make contracts on his or her behalf Created on 4 forms of authority By expressed agency or agency by agreement By implied authority By apparent agency or agency by estoppel By ratification Agency agreements usually do not need to be in writing with 2 exceptions 1 Must be in writing whenever an agent will enter into a contract that the statute of frauds requires to be in writing 2 The agreement must be in writing whenever an agents given power of attorney Agency by implied authority cannot conflict with any express authority Agency of estoppel can be created only on the acts of the principal never on the basis of what the purported agent says or does Principal Agent significant for contract law Employer Employee significant for tort law tax law wage law discrimination law copyright law Employer independent contactor significant for tort law tax law wage law discrimination law copyright law Independent contractors cannot enter into contracts on behalf of the principle unless the contractor possesses authority from the principal Employers are generally liable in tort for the actions of their employees while they are generally not liable for the actions of independent contractors Employer Independent contractors are not subject to works compensation workplace safety employment discrimination and unemployment statutes Agency relationships are fiduciary relationship of trust confidence and good faith The principle owes specific duties to the agent Failure to fulfill these rights provides the basis for a tort or contract action against the principal Duties of the Principal Duty of Compensation Duty of reimbursement and indemnification Duty of cooperation Duty of sake working conditions Duties of the agent Duty of loyalty Duty of performance Duty of notification Duty of obedience Duty of accounting The rights and remedies of the principal Constructive trust Avoidance Indemnification The rights and remedies of the agent Tort and contract remedies Demand of an accounting Specific Performance Classification of the Principal The principals must be classified as either disclosed partially disclosed or undisclosed Principal s tortuous conduct the law holds a principal directly responsible for his own tortuous conduct under two conditions 1 the principle directs the agent to commit a tortuous act and 2 the principal fails to provide proper instruments or tools or adequate instructions Agent misrepresentation If an agent misrepresents himself to a 3rd party the principal may be tortiously liable for the agent s misrepresentation An individual who hires an independent contractor cannot be held liable for the independent contractors tortuous actions under the doctrine or respondeat superior unless the contractor engages in hazardous activities Termination by acts of parties Termination may occur by lapse of time fulfillment of purpose occurrence of a specific event mutual agreement by the parties revocation of authority or renunciation by the agent Termination by operation of law the agency relationship may be terminated automatically due to death insanity bankruptcy changed circumstances change in law impossibility disloyalty of agents or war Who is liable Disclosed the principal is liable instead of the agent Partially Disclosed Generally the agent is not held liable and the principal is but the agent may be held liable for contractual nonperformance Undisclosed the agent is liable but the principal is liable to the agent unless the contract