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Business Associations/Corporations
Rutgers University, Newark School of Law
Dickerson, Claire Moore

I. UNINCORPORATED BUSINESSES
 
A.     SOLE PROPRIETORSHIP
 
AGENCY=the relationship which results from:
 
1) the manifestation of consent by one person to another that [CONSENT BY PRINCIPAL] 2) the other shall act on his behalf and subject to his control, and [PRINCIPAL CONTROLS AGENT—who acts in place of/as the principal] 3) consent by the other so to act [CONSENT BY AGENT]  
*MANIFESTATION = what a person in the AGENT’S POSITION WOULD REASONABLY BELIEVE.
*AGENCY = power to create a BINDING relationship btwn the PRINCIPLE and a THIRD PARTY!
 
*Agency = FIDUCIARY relationship!!
NO K RELATIONSHIP OR COMPENSATION NECESSARY for there to be AUTHORITY
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RESTATEMENT AGENCY, 2d
 
§ 2—MASTER; SERVANT; INDEPENDENT CONTRACTOR
(1) A master is a principal who employs an agent to perform service in his affairs and who controls or has the right to control the physical conduct of the other in the performance of the service.
(2) A servant is an agent employed by a master to perform service in his affairs whose physical conduct in the performance of the service is controlled or is subject to the right to control by the master.
(3) An independent contractor is a person who contracts with another to do something for him but who is not controlled by the other nor subject to the other’s right to control with respect to his physical conduct in the performance of the undertaking. He may or may not be an agent.
*MASTER/SERVANTà master tells the servant HOW TO DO THE JOB…not so for independent contractor.
 
§ 3—GENERAL AGENT; SPECIAL AGENT
(1) A general agent is an agent authorized to conduct a series of transactions                      
       involving a continuity of service.
(2) A special agent is an agent authorized to conduct a single transaction or a series of transactions not involving continuity of service.
 
§ 7—ACTUAL AUTHORITY  
§         Authority is the power of the agent to affect the legal relations of the principal by acts done in accordance with the principal’s manifestations of consent to [the agent].
 
§ 8—APPARENT AUTHORITY à no express authority…to revoke, P must communicate to THIRD PARTY!
§         Apparent authority is the power to affect the legal relations of another person by transactions with third persons, professedly as agent for the other, arising from and in accordance with the [principal’s] manifestations to such third persons.
 
 
 
§ 8A—INHERENT AGENCY POWERS
§         Inherent agency power

existence of the agency relation.
 
§ 379— DUTY OF CARE AND SKILL
(1) Unless otherwise agreed, a paid agent is subject to a duty to the principal to act with standard care and with the skill which is standard in the locality for the kind of work which he is employed to perform and, in addition, to exercise any special skill that he has.
(2) Unless otherwise agreed, a gratuitous agent is under a duty to the principal to act with the care and skill which is required of persons not agents performing similar gratuitous undertakings for others.
 
§ 387— GENERAL PRINCIPAL [DUTY OF LOYALTY] §         Unless otherwise agreed, an agent is subject to a duty to his principal to act solely for the benefit of the principal in all matters connected with his agency.
 
§ 388—DUTY TO ACCOUNT FOR PROFITS ARISING OUT OF EMPLOYMENT
§         Unless otherwise agreed, an agent who makes a profit in connection with transactions conducted by him on behalf of the principal is under a duty to give such profit to the principal.