2. Contracts (= when an action of an agent can be binding on the principal)
Unincorporated Business Associates
2. Limited Partnerships (LP), Limited Liability Company (LLC) à less uniform, states differ
(Revised) Uniform Partnership Act (RUPA)
Ø RUPA: FL law (relatively new, previously UPA)
v What the challenge transaction?
v What is the role of the actors in relationship to that transaction?
England (12th -17th century)
Servants work for Masters
Agency: When one person authorizes another person to act on his behalf in a particular transaction and that other person agrees to do it. Agency is a fiduciary relationship that results a manifestation of consent by one person (principal) to another person (agent), that that other person (agent) shall act on behalf of, and subject to the control of the principal and by subject to the consent of the principal to do so.
Authority: Principal giving agent authority to act on his behalf (what agent reasonably believes principal asks him to do)
1. Consent (express/implied)
3. Acting on behalf of the principal
4. Consent by the other to act
Formalities are not required
TODAY: Can be implied, authorized by K
à Master is bound by conduct of servant
v When will master be held vicariously liable?
v When will the principal be bound by the K of the agent?
1. Find an agency relationship
2. Establish Duty
3. If duty was breached, there is a liability
Douglas v Steele – Breach of Fiduciary Duty of Travel Agent’s Disclosure
F: Couple bought tickets to Hawaii, relying on travel agent, tour company goes bankrupt, yet agent kept $100 booking fee, Agent acted on behalf of customer (Douglas) à Control: they decided which trip
I: What there a fiduciary relationship b/w the tour company and the travel agent?
H: Custom in the community: Agent is working for customer and had duty to discover and disclose to his principal (Douglas).
Steele had fiduciary duty that she breached
Special agent: Specific transaction
Fiduciary Duty: Duty of care, good faith, to disclose, loyalty
Hunter v. Mgt Assistance
F: MAI: makes computer software, Hunter buys software from Hubco and distributes it to clients
1. Consent? Yes, MAI allows Hubco to sell their products
2. Control? Limited control: Hubco is servant on behalf of MAI (principal) à Did client enter into K w/ Hubco or MAI?
R: No! Not enough control – You are not dealing w/ principal directly b/c principal sold software to Hubco
à Some control does not create agency relationship
à Purchase and resale does not create an agency relationship
àRULE: Does not control day-to-day or operative details of the dealer’s business in an agency potentially created
Whoever employs another is responsible for the actions of that other (employees) (respondent superior)
à only imposed onto servants
RULE: The act of the servant is the act of his master, where he acts by authority of the master, and the master has a sufficient amount of control, then employer is vicariously lia
of the employer
8. Belief of the parties àwhat do the individual people think?
LOOK AT THE TOTALITY OF THE CIRCUMSTANCES
Nelson v Countrywide Home Loans
F: Home refinance, but loan did not close b/c employer was negligent and % went up. Employee claims respondent superior
I: Was is K or tort?
H: Employee violates duty b/c she committed a tort à respondent superior does not shield employee from liability, it adds a defendant
Difference b/w tort and K: When A commits a tort, and vicariously, his master is liable
When A makes a K w/ 3rd party on behalf of principal and principal breaches, A is not liable.
Home Design v. KS Dept of HR
F: Install products and offers siding installation – use installers to increase profits
TEST: Look for existence of the right or authority to interfere or control
I: Was it independent contractor?
H: Dress, tools, time when to show up, (own) car, ability to negotiate, who offers insurance, ability to reject the job?
Any agent is either a servant or an independent contractor. If the agent is servant then you get vicarious liability, if contractor – no vicarious liability
Distinction b/w servant and IC – consider factors in Santiago and decide on the totality of the circumstances