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Agency

Agency. Chapter 17. Agency. Relationship between two parties in which one party (agent) agrees to represent or act on behalf of another party (principal) Examples: employer-employee independent contractor. Agency.

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Agency

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  1. Agency Chapter 17

  2. Agency • Relationship between two parties in which one party (agent) agrees to represent or act on behalf of another party (principal) • Examples: • employer-employee • independent contractor

  3. Agency A fiduciary relationship that results when principal authorizes or consents to allow an agent to act on his or her behalf. fiduciary – a person acting for the benefit of another, a duty of trust and confidence

  4. Formation of Agency • Written Agreement • Oral Agreement (if performable in one year) • Implied by conduct • Estoppel- “apparent authority” • actions of principal must imply authority • (not actions of agent) • reasonable person must believe agency exists. • Implied by operation of law • By ratification

  5. Agency Relationships • Employee • One who works for, and receives payment from, an employer. • Whose working conditions and methods are controlled by the employer. • For whose acts and omissions occurring in the scope of employment the employer is liable.

  6. Agency Relationships • Independent Contractor • One who does work for, and receives payment from, an employer. • Whose working conditions and methods are not controlled by the employer. • For whose acts and omissions the employer is not liable.

  7. Employer-Employee Relationships • Determine whether an employee or independent contractor by the following: • Direction and control the employer exercises over the details of work • Who supplies tools used at workplace • Degree of skill is required of the worker • Duration of employment • Method of payment

  8. Employer-Employee Relationships • Primary factor the IRS uses to determine whether an employee or independent contractor: • Direction and control the employer exercises over the details of work

  9. Agent’s Duties to Principal • Performance • Notification • Loyalty • Obedience • Accounting

  10. Principal’s Duties to Agent • Compensation • Reimbursement • Indemnification • Cooperation • Safe Working Conditions

  11. Liabilities in Agency • Principal is liable for agent’s contracts, if agency is disclosed • Principal is liable for agent’s torts if agent in “course and scope of employment”

  12. Liabilities in Agency • Respondeat Superior -- the doctrine by which an employer or other principal is liable, along with the agent or employee, for any tort committed by the agent or employee while acting within the scope of their agency or employment. • Does not apply if agent is on a “frolic” of his own

  13. Liabilities in Agency • Principal not liable for most criminal acts unless criminal activity was directed by principal (but are liable for intentional torts committed in scope of employment)

  14. Termination of Agency • Lapse of Time • Purpose Achieved • Occurrence of Event • Mutual Agreement • Revocation (unless coupled with interest)

  15. Termination of AgencyBy Operation of Law • Death or insanity (Statutory Durable Power of Attorney • Authority continues after principal becomes disabled) • Impossibility • Materially changed circumstances • Bankruptcy • War

  16. Agency End of Chapter 17

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