Agency involves the extent to which a first person incurs an obligation or responsibility to a third person based upon the words or actions of a second person. Agency also involves the extent to which one Is contractually obligated to reasonably perform duties for another.
Common law Elements:
1) A first person manifests assent,
(2) That a second person,
(3) Shall act on the 1st person’s behalf,
(4) and be subject to the first person’s control,
(5) and the second person agrees.
Federal law elements of agency:
2. Fiduciary duty
3. Absence of gain or risk to the agent
4. Control by the principal (most important)
The law PRESUMES agency relationship.
It has been said that a relationship of agency always “contemplates three parties—the principal, the agent, and the third party with whom the agent is to deal.
Perhaps we impose liability because it is good for the economy that people employ agents; more commerce equals more jobs. If people cannot demand indemnification from agents, they will be less likely to employ agents and commerce will suffer! Control means control over ultimate goal, not ministerial ways and means.
An agency relationship arises only when the elements stated in § 1.01 are present. Whether a relationship is characterized as agency in an agreement between parties or in the context of industry or popular usage is not controlling.
1). Principal’s power and right of interim control—in general. An essential element of agency is the principal’s right to control the agent’s actions. Control is a concept that embraces a wide spectrum of meanings, but within any relationship of agency the principal initially states what the agent shall and shall not do, in specific or general terms. Additionally, a principal has the right to give interim instructions or directions to the agent once their relationship is established. Within an organization the right to control its agents is essential to the organization’s ability to function, regardless of its size, structure, or degree of hierarchy or complexity. In an organization, it is often another agent, one holding a supervisory position, who gives the directions. For definitions of the terms “superior” and “subordinate” coagents, see § 1.04(9). A principal may exercise influence over an agent’s actions in other ways as well. Incentive structures that reward the agent for achieving results affect the agent’s actions. In an organization, assigning a specified function with a functionally descriptive title to a person tends to control activity because it manifests what types of activity are approved by the principal to all who know of the function and title, including their holder.
A relationship of agency is not present unless the person on whose behalf action is taken has the right to control the actor.
Question of fact/Question of law=> Agency is a question of fact to be determined by the jury or other trier of facts unless no competent evidence legally sufficient to prove it has been introduced or the material facts from which it is to be inferred are undisputed and only one conclusion can be reasonably drawn. On the other hand, agency is a question of law for the court where the material facts from which it is to be inferred are not in dispute, the question of agency is not open to doubt, and only one reasonable conclusion can be drawn from the facts. When the facts are not disputed, the question of agency should be resolved by the court. P. 199
Rest. Agency- the fiduciary relation which results from the manifestation of consent by one person to another that the other sha
integrity of the Basic Four products line. Only when a manufacturer controls the day to day or operative details of the dealer’s business is an agency potentially created.”
Edwards v. NSS (wrongful death in mountain against nonprofit organization that has internal organizations) K says that every internal organization shall have complete freedom of action in its organization and fiscal policies, except it shall not engage in detrimental to the best interests of NSS.
NSS has “no right of control” over local chapters, they can only fire them or revoke them- not enough.
Dierkesen v. Albert- (gift vs. trust) the essential elements of a valid inter vivos gift are: 1. Donative intent 2. Actual delivery of the subject matter, and 3. Donor must strip himself absolutely and irrevocably of all dominion and control over the subject matter of the gift. It is the agency relationship which predominates, and the principles of agency, rather than the principles of trust, are applicable.
Rest. Trust and Agency
An agency is not a trust.
Title- A doesnot have title, but may have powers. T has title.
Control- A undertakes to act on behalf of his P and subject to control. T is not subject to control of B, but obligated to benefit B.
Liability- A may subject P to L to 3P. T cannot subject B to L.
Consent- A needs consent b/n P and A. Trust does not need consent or knowledge of B or T/ee.
Termination- A terminated at will, death, or incapacity. T is not.