chapters 14-21

Agency Relationships

• An agency is created when a person or company (the agent) agrees to act for or in place of another person or company (the principal).
• Agents and principals have a scope of authority, and within this scope the agent can bind the principal to contracts with third parties.
• Real estate agents are a common type of agent.
• Owners/employers are a common type of principal.

Types of Agencies

• Universal Agent: Authorized to do all acts legally permissible for an agent. Usually has a general power of attorney.
• General Agent: Authorized to handle all transactions connected to a certain business(e.g., running a specific retail store), not only specific ones.
• Special Agent: Authorized to represent the principal in specific transactions, usually for a limited time.
• Agency Coupled with an Interest: Agent who takes a financial interest in the transaction or business they represent on behalf of their principal.
• Gratuitous Agent: Agent who volunteers to act for their principal, without pay.
• Subagents: Agents authorized by the principal to delegate their authority to other agents.

Agency Creation

• Agreement: Written or oral consent between parties for the agency relationship to be formed.
• Ratification: Agent's actions are ratified or approved by the principal after the fait.
  • Express ratification: Principle clearly signals their consent.
  • Implied ratification: Principle accepts benefits of the agent's actions, knowing they acted on the principal's behalf.
• Agency by Estoppel: Principle's actions lead a third party to reasonably believe an agency relationship exists.

Types of Authority

• Actual Authority (Real Authority): Based on explicit or implicit instructions to act on the behalf of the principal.
• Express Authority: Oral or written instructions given.
• Implied Authority: Authority to act reasonably to accomplish tasks explicitly set out in formal instructions.
• Apparent Authority: Created when a principal, by words or actions, leads a third party to believe an agent has authority to act on the principal's behalf, even if the agent doesn't have explicit authority.

Duties

• Principal's Duties to Agent: Cooperate, compensate, reimburse, and indemnify (protect from harm).
• Agent's Duties to Principal: Loyalty, obedience, performance, reasonable care, accounting, and notification.

Liability for Contracts

• Disclosed Principal: Third party knows the identity of the principal. The principal is liable for the contracts.
• Undisclosed Principal: Third party does not know the identity of the principal. The agent is liable for the contracts, but can seek indemnification.

Employment Relationships

• Employer-Independent Contractor: Person contracted to do something for the employer, without the employer controlling how the work is done. Tax obligations (social security and income taxes) are not usually withheld for them.
• Employer-Employee: A person who works for the employer. Employer controls the work performed. Employer usually withholds tax from employee's pay.
• Determining whether someone's an independent contractor or employee is based upon the employer's control over the details of their work.
  • Extent of employer's control;
  • Type of work performed;
  • Skill required for the job;
  • Provision of tools/supplies by employer;
  • Duration of the relationship.

Employment At-Will

• In common law, either party can terminate an employer-employee relationship at any time for any reason (or no reason), unless it violates an existing contract or exceeds established public policy grounds.
• Exceptions do exist (in some cases, violations of public policy).

Employment Contracts

• Express Contracts: Written or oral agreement between employer and employee for specific employment terms.
• Implied Contracts: Contracts created through the employer's actions, communications, or statements to the employee. E.G., an employee handbook may imply terms of employment.
• Implied Covenants of Good Faith and Fair Dealing: Some states recognize employers have an implied duty to act fairly and in good faith in their dealings with employees.

Principal's Liability for Agents' Torts

• Employers are generally liable for torts committed by employees within the scope of employment.
• They are not, however, usually liable for torts committed by employees outside the scope of their employment.
• This includes negligent or intentional torts committed by the employee in the course of employment..

Employment Discrimination

• Title VII: Federal law prohibits discrimination based on race, color, religion, sex, or national origin. Includes sexual harassment, unwelcome sexual advances.
• Age Discrimination in Employment Act (ADEA): Protects individuals over 40 from employment discrimination.
• Americans with Disabilities Act (ADA): Prevents discrimination by employers toward people with disabilities in employment.
• Claims: Employees must follow specified procedures if they believe they've been unjustly fired, or otherwise treated unfairly, because of their protected class.
• Remedies: Court remedies are a variety of compensatory and punitive damages for violations of discrimination.
• Public Policy: Refusal to commit an illegal act or exercising a public right.

Labor Relations and Unions

• National Labor Relations Board (NLRB): A federal agency that oversees labor relations.
• Collective Bargaining: Negotiations between employers and unions to establish employment contracts for employees.

Securities Regulation

• Securities: Financial instruments (stocks, bonds) for raising capital.
• Securities Act of 1933: Regulates the public offering of securities.
• Securities Exchange Act of 1934: Regulates the trading of securities.
• Registration Statements: Required by the SEC. Detailed info on the offered securities.

Securities Fraud

• Rule 10b-5: Prohibits various forms of securities fraud, including material misstatements, omissions, and deceptive schemes.
• Insider Trading: Illegal practice of buying or selling securities based upon non-public information.

Environmental Law

• Private nuisance: Unreasonable interference with use and enjoyment of property.
• Public nuisance: Unreasonable interference with rights of public members.
• Trespass: Unauthorized entry onto another person's property.
• Strict liability for abnormally dangerous activities: Liability for harm to others from dangerous activities, despite due care given.
• Environmental statutes: EPA regulates air and water pollution. Acts include the Clean Air Act, the Clean Water Act, and the Toxic Substances Control Act. Enforcement can include cease and desist orders, fines, and damages.

Endangered Species Act

• Protects endangered plant and animal species, and their habitats.
• Prohibits actions that could destroy or modify habitats.
• Federal agencies like the U.S. Fish and Wildlife Service are important for compliance.

Explore the fundamental concepts of agency relationships, including the roles of agents and principals. This quiz covers various types of agency, such as universal, general, and special agents, along with their distinct characteristics and legal implications. Test your understanding of how these agencies operate in real-world scenarios.