Agency Law PDF

Agency Law of Agency Governs the legal relationship formed between two people when one person agrees to perform work or act as an “agent” for another Principal / Agent Master / Servant Employer / Employee Authority in Agency Relationships Agency relationships and/or r...

Agency Law of Agency Governs the legal relationship formed between two people when one person agrees to perform work or act as an “agent” for another Principal / Agent Master / Servant Employer / Employee Authority in Agency Relationships Agency relationships and/or respondeat superior can be formed in several ways: Actual Authority: Principal hires or expressly specifies an agent (POA) Loading… Apparent Authority (agency by estoppel): Reasonable third party would understand an agent had the authority to act Ratification: Principal ratifies/adopts/approves an act which has already been done in his/her/their name and on his/her/their behalf by another person (agent) who in fact had no actual authority to do so. Authority in Agency Relationships Principal Actual Apparent Authority Authority Agent Third Party Perception Fiduciary Obligations Agents owe fiduciary duties to a principal Duty of Loyalty Loading… Duty of Care  Duty of Loyalty Duty to act faithfully with regard to one’s obligations and duties Higher standard of behavior trustee like Put interests of business entity ahead of own interests  Duty of Care Duty of due care in performing duties Requirement to act in good faith Counterpart of common law negligence duty to exercise the care that an ordinarily prudent (carefully) person would exercise in the same or similar circumstances Must act in best interests of enterprise Respondeat Superior “Let the master answer” An employer is liable for acts of an employee within scope of employment If the employee’s actions go beyond the scope of employment or are severely egregious, respondeat superior may not follow Agent is always liable for his/her/their own torts Plaintiff can sue both employer and employee Independent Contractors Independent contractors may be agents but are NOT employees Respondeat superior does not follow for Independent Contractors Independent Contractor or Employee? Factors to consider: Extent of Control Type of Work Skill Required Amount of Supervision Use of Employer’s tools, equipment, etc. Paid by job, hour, etc. Whether work is part of employer’s regular business Whether parties believe they are entering into an employment relationship and how long the relationship has existed,