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Business Associations
University of Kansas School of Law
Hecker, Edwin Webb

Business Associations 1 Outline- Hecker- Fall 2006
Agency R3d §1.01- Agency relationship arises when the principal manifests consent to the agent that the agent shall act on the principal’s behalf and subject to the principal’s control and the agent consents to act. 
Agent R2d § 1 (3)- person who by mutual assent acts on behalf of another and subject to another’s control
General agent R2d § 3 (1)- authorized to conduct a series of transactions involving continuity of service
Special agent R2d §3 (2)- authorized to conduct only a single transaction, or only a series of transactions not involving continuity of service
Principal R2d §1 (2)- person for whom the agent acts
Disclosed R3d §1.04 (2)a- when an agent and third party interact, the third party has notice that the agent is acting for a principle and has notice of the principal’s identity
Partially disclosed or unidentified R3d § 1.04 (2)c- third party has notice that the agent is acting for some principle but does not have notice of principals identity
Undisclosed R3d § 1.04 (2)b- third party has no notice that the agent is acting for a principal.
Manifestation R3d 1.03- A person manifests assent or intention through written or spoke words or other conduct
Notice R2d §9 (1)- a person has notice of a fact if he knows of the fact, has reason to know, should know, or has been given notice
Notification R2d § 9 (2)- informs him of the fact by advocate or specified means or of other facts which he has reason to know or should know or does an act which has the same effect on the legal relations of the parties as the acquisition of knowledge or the reason to know.
Principals relations with third parties
Tort Liability
Respondeat superior R3d §2.04- An employer is subject to liability for torts committed by employees while acting with in the scope of their employment
Must be an employee
Master (principal) R2d §2 (1)- a principal who employs an agent to perform service in his affairs and who controls or has the right to control the physical conduct of the other in the performance of the service
Servant (employee) R2d § 2 (2)- an agent employed by a master to perform service in his affairs whose physical conduct in the performance of the service is controlled or is subject to the right to control by the master
Independent contractor R2d §2 (3)- a person who contracts with another to do something for him
To determine whether one acting for another is servant or independent contractor, the following matters are considered R2d §220 (2)
The extent of control which, by the agreement, the master may exercise over the details of the work (a)
Whether or not the one employed is engaged in a distinct occupation or business (b)
The kind of occupation, with reference to whether the work is usually done under the direction of the employer or by a specialist without supervision (c)
The skill required in the particular occupation (d)
Whether the employer or the workman supplies the instrumentalities, tools, and the place of work for the person doing the work (e)
The length of time for which the person is employed (f)
The method of payment, whether by the time or b

of scope of duty unless R2d §219 (2) (a-d)
Authorization- R2d §212- Principal is directly liable as if he had acted himself when he, knowing of the circumstances, directly authorizes or intends the agent to commit the tortuous act or consequenses.
Recklessness or negligence- R2d § 213 subject to liability for harm resulting from his conduct if he is negligent or reckless
In giving improper or ambiguous orders or in failing to make proper regulations (a)
In the employment of improper persons or instrumentalities in work involving risk of harm to others (b)
In the supervision of the activity (c)
In permitting, or failing to prevent, negligent or other tortuous conduct by persons, whether or not his servants or agents, upon premises or with instrumentalities under his control (d)
Non-delegable duty R2d § 214- If principal is engaged in inherently dangerous or ultra-hazardous activities, he is liable for harm that occurs even if hired independent contractor to do the work
Ratification- R2d § 218- upon ratification, a purported master or other principal becomes subject to liability for injuries caused by the tortuous act of one acting or purporting to act as his agent as if the act had been authorized, if there has been no loss of capacity by the principal.