Agency relationship – When may someone act for another
Various duties of the parties – Define Principal v. Agent
3rd parties to K and in general
Principal is delivery service
Agent is driver
– go after principal- deep pockets $$$
Hire employees to conduct business for you- (employees subset of agents) –
Business relationships got more complicated and agency evolved.
Vicarious Liability – go after lord (master) for any tort liability of the servant.
Master = Principal ; Servant = Agent
When is Principal liable for acts of agent?
– agent must be acting w/in the scope of employment
Definition of Agency §1
Manifestation of assent between principal and agent
Actual consent (authority)
Apparent consent (authority)
i. May just be w/in job description if hire someone as gen. manager.
‘On behalf of’ requirement (agent must be working on behalf of principal)
if agent has independent profit motive then supplier and may be different from agency relationship
Control- agent is subject to control of principal – Different levels of control-
Ex: Realtor – working on behalf of you, but still on own behalf, manifestation of assent b/c entering into sales agreement, have some control- when to show house, selling price
Ex: Disney hired agents to go out and buy the land. Didn’t tell they were buying for Disney world b/c price would go up. 3rd party didn’t know who principal was.
Definition of Principal §4
Important in determining tort liability
Disclosed principal – 3rd parties usually want to know
Partially disclosed – know agent is acting on behalf, but don’t know principal name. 3rd party wants proof that agent can carry through w/ deal. (show escrow acct w/ $)
Undisclosed – (Disney)
If Principal is master then employment relationship.
Who is an Agent? § 3
General agent- (general manager of store)
– authorized to conduct series of transactions and involves continuity of service D(full time employee, or working on more than just 1 transaction)
Special Agent (realtor) or Disney agent
– hired specifically for 1 or more specific transaction
Sub Agent §5 – Agent hiring another agent to complete transaction (real estate broker has brokers ) but primary agent has to be authorized to create subagent relationship. ( prof. can’t hire another adjunct to teach class and delegate responsibility)
– non agents
o does principal have control over day to day physical conduct = if yes, then employee r
– supplier/ buyer analysis (pg. 7 of case) factors indicating supplier rather than agent. (hunter mining)
Issue: mutual consent- was there an “actual agency” relationship between Cargill and Warren.
JF were farmers in small town ;
Warren owes farmers $2M
– if W inc. then can only get assets of co.
– if sole proprietor then could go after Lloyd hill (owner)
– Π going after C b/c only entity that has $.
1964- Warren entered into agreement w/ Cargill for capital “open account financing”
Warren supposed to deposit proceeds to Cargill.
1967-70 – extension of credit line- (semi- debtor/creditor relationship) C demands access to operations and expenses and recommending certain actions. C never implemented recommendations. (no control yet)
1973- C began overseeing day to day operations –
1977- C did audit W financial problems, debt $5M- Farmers went to Cargill (knew b/c $ rec’d checks drafted by C-also b/c 1971 W acting as special agent for C for sunflower seeds) Representation to farmers- Estoppel- if farmers detrimentally relied .
(Π arguing for actual authority because damages higher than apparent)