Business Organizations Outline
Judge Huffman-Summer 2007
Part 1: Agency
Agency-an agent acts on behalf of principle and can bind the principal in K by word, act, or deed.
Agency cont.-fiduciary Relationship resulting from manifsetation of the principal and the agents consent to act on the principal’s behalf
Agent à Principal à 3rd Party
-Agent/Principal=Binds in K
-Master/Servant=Binds in Tort
TO HAVE AN AGENCY RELATIONSHIP YOU MUST HAVE:
1. Mutual Consent of A & P
2. Agent acting on principal’s behalf
3. Control/Sub-servience element
Control-some element of subservience. Agent acts within parameters/containment by principal.
Consent-can be either formal or infromal by word, action or deed
-(Behavior of the parties decides whether or not an Agency realtionship has been created, typically a jury question)
-Principals and Agents do not have to be individuals, they can be corporations, etc.
-The law of agency is distinct from K law, therefore there need be no consideration.
-Marriage, Co-owners of property do not automatically establish A/P relationships
-If agent is acting within his authority, the principal is bound to any K’s entered into on his behalf.
-Anyone can do anything for you so long as “you/they” legally can do it. (2exceptions)
1. personal service (i.e. Guest speaker cannot send his agent due to personal service ideal)
2.public policy (i.e. a doctor cannot
y a reasonable interpretation
Authority by implication-(subsection of actual authority), “things unsaid”
i.e. I hired Sam in the past, they said I could hire someone, I can hire Sam again (from past express authority it can be implied)
Authority by past performance-implies that from what happened in the past course of dealings implies similar dealings and authoirty for the future. (course of dealings)
-Can you infer from past circumstances that you can repeat? If so it is implied from p.p.
Apparent Authority-(without any express/implied)-created when then principal manifests to the third party that throug his or her actions or words that the agent has power.
1. Principal leads third party to believe that the agent has power and
2. It is limitied in scope to what a reasonable person would believe from P’s manifestation
-Apparent authority is actually a misnomre b/c it doesn’t represent any actual authority. It just gives power from the appearance of legitimate authority of the agent. Appears from the manifestation of Principal.
-The purpose of App. Authority is to protect the innocent 3rd party.
-Apparent authroity can coexist with actual authority, but there must be some “grain of tracability to the manifestation of P”