AGENCY
I. Who is an Agent?
a. RS §1 “Agency” – the fiduciary relation which results from the manifestation of consent by 1 person to another that the other shall act on his behalf and subject to his control, and consent by the other to so act.
1. Principal à the one for whom action is to be taken
2. Agent à the one who is to act
ii. 3 principal forms of Agency:
1. Principal & Agent (deals w/ Ks and communication);
2. Master & Servant (deals w/ torts); and,
3. Employer/Proprietor & Independent Contractor (communication or statement).
Three Elements Required to Show Agency Relationship:
(1) Manifestation by Principal that Agent will act for him
(2) Acceptance by Agent of the undertaking, and
(3) Understanding b/w them that Principal will be in control of the undertaking.
(4) Burden is on person alleging the existence of an Agency relationship
b. Vicarious Liability – wrongful act of Agent is imputed upon Principal to ensure that injured party obtains remedy for wrongful act done by Agent. It’s important to know who Agent is in order to go after the “deep pockets” of Principal.
i. Gorton v. Doty (1937) – Facts: Kid injured in car accident driven by football coach. Π’s argue that coach was acting as Agent of Owner. Owner of car argued that she simply loaned her car and nothing more. App: Owner volunteered use of her car upon express condition that coach drive it, and his consent to do so stemmed from his act of driving the car. Owner manifested her consent that coach could use her car for the narrow purpose under narrow conditions. Held: Owner is a principal. Thus, coach’s negligence is imputed to owner; she has to pay for injuries.
1. For Agency, you need an agreement b/w Principal and Agent, but not necessarily a K, promise, or compensation. It may result although parties do not call it an agency and do not intend the legal consequences of the relation to follow (circumstantial evidence).
2. Ownership alone, regardless of presence/absence of owner in car at time of accident, establishes a prima facie case against the owner b/c presumption arises that driver is the agent of the owner.
3. Injured party gets favored by the law, more than owner who is also innocent b/c she could protect herself through her insurance, which covers any accidents by others driving the car, and she voluntarily made a conscience choice to give the coach her car.
ii. A. Gay Jenson Farms Co. v. Cargill, Inc. (1981) – Facts: Warren had some unsettled accounts w/ farmers, when it entered
e is a supplier, rather than an agent:
a. Supplier is to receive a fixed price for the property irrespective of price paid by him – most important.
b. Supplier acts in his own name and receives the title to the property which he thereafter is to transfer.
c. Supplier must have an independent business in buying and selling similar property.
2. Thus, Cargill ends up on the hook for another $2M owed to the farmers by Warren. Had Cargill kept his role as a simple lender then it would not have to pay the farmers.
a. Precautions à
i. Cargill – could’ve been careful in limiting degree of control, by being specific and detailed, and by keeping the relationship at arms-length.
ii. Farmers – if they weren’t feeling secure w/ Warren paying them, they could’ve:
1. Asked Cargill to guarantee Warren’s payment (w/ line of credit);
