Agency generally R2d

O lements (R2d)
4 A person
orp could be a principal or agent

4 2 ManiIestation and prooI oI agency
%e P must maniIest to te A
onsent tat te A sould act on P`s bealI
O Doesn`t ave to be in writing or even orally
4 ould be implied
And subject to P`s control

4 te necessity oI consent
onsent:
O P tat te agent sall act on Ps bealI and subject to Ps control
O A must consent to so act.
Req knowing consent Irom bot parties
O Agreement could be gratuitous
O No Iormal agreement needed
ven iI minor, can still be agent

4 on bealI oI te principal
P can`t delegate personal duty to agent.
O Statute or K req P to perIorm personally
O g. signing a contract Ior P.
4 control by te principal
P directs te result or objectives oI agent
O Just speciIy task agent is to perIorm

O Note:
4 Burden oI prooI on te party claiming an agency relationsip exists.
4 an still ave agency even iI no beneIit to principal.
4 Don`t need a K or compensation.
4 Intent doesn`t matter, circumstantial evidence ok.

O ases:
4 49 - borrowed car Ior Iootball game; owner liable Ior accident
4 Cargill - Grain producer in debt. reditor exercising control over debtor. reditor
interIerence in day to day aIIairs. Agency exists.






Agency generally R2d

Liability oI P to % in K

O Agent`s Authority

4 .) Actual Authority

Focus: btwn P and A

A.) 5ress Actual Autority
O Rule
4 xpressly granted autority eiter orally or in writing.

O g. P tells A to do X; A does X; P is bound
4 % doesn`t need to know oI A`s agency

B.) 25lied Actual Autority
O Rule -
4 - Autority tat te principal intended te agent to possess
AND
Intent is proven by:
O Reasonableness
O ustom
4 Prior similar practices - speciIic conduct
by te P in te past permitting te A to
exercise similar powers
4 2 - includes suc powers as are practically necessary to carry
out te delegated duties

O g. P can`t tink oI all it would autorize A to do
4 II A takes on oter steps necessary to carry out P`s express
instruction, P is bound.
O ase
4 4gan curc painting case, ires broter
4 asser P told A (Iriend and attorney) to settle dispute. A
settled and P disagreed wit terms. % tougt A ad autority
%is case as actual, implied and apparent autority








Agency generally R2d

4 2.) A55arent Authority

Rule Autority tat te % reasonably believes an A as, based on %`s

dealings wit te P
O lements
4 P must old out A as possessing certain autority
Note: even iI A doesn`t Iully disclose scope oI autority

4 2 % must reasonably believe A as suc autority
g.
O Iax/pone call Irom P to % about A
O Past practices
O Knowingly stood silent
ase
O 25ex
4 A, sales rep, sold P`s processor at ceap rate.
A`s position carries wit it customary powers wen P
placed A tere.
% reasonably believed A ad autority
O Analysis
4 Actual Autority: iI an agent knows e as a principal`s autority
Looks to communications between P and A
4 Apparent Autority: iI actual autority does not exist, but a % reasonably believes
Irom te principal`s actions tat autority exists
4 Implied Autority: actual autority tat te principal never Iormally conIerred, but
tat can be inIerred based on te autority granted and past conduct between te P
and te A
4 Note: II te % knows tat te autority does not exist ten all autority is destroyed.


O .) nherent Agency Power |Undisclosed Principal Rule (R2d)|

4 Wen a principal is undisclosed to %, te actions taken by an agent in Iurterance oI
te P`s usual and ordinary business binds te P.
ase enwick
O Former owner oI tavern, wo is now an agent oI new owners buys
stuII te P doesn`t want. P still liable.
O t will try to let P take te loss rater tan te innocent % as long as it
is customary

4 xception Rd Liability oI Undisclosed Principal
%o relieve P oI liability P sould take reasonable steps to notiIy %


Agency generally R2d

O .) #atification

4 Spotter A acts on bealI oI P witout any type oI autority or tere was no prior
agency relationsip btwn P and A.
II P ratiIies A`s act, P may be bound.
O Usually implied aIIirmation

4 Rule te aIIirmance by a person oI a prior act wic did not bind im but wic
was done or proIessedly done on is account
O %e alleged aIIirmation must come at a time wen it is possible to
decline to accept te beneIits.
4 II P never ad a cance to turn down te beneIits given by %, P
cant be eld liable.
Just because P receives proceeds does not make P party
to transaction
Req:
O acceptance oI te results oI act wit an intent to ratiIy
O wit Iull knowledge oI all te material circumstances
Analysis:
O .) Wat type oI acts constitute an aIIirmation by te P?
O 2.) Wat eIIects sould we give to tat aIIirmation?

4 ase 499icell4
Man leased ouse wit option to purcase Irom usband and tougt was
buying wole property, but only leased usband`s alI not wiIe`s. Just
because wiIe stood by as man made improvements to property does not mean
se knew te terms oI te agreement aka no ratiIication.
O WiIe didn`t ave a cance to turn down Man`s improvements.

O .) sto55el

4 %e P is estopped Irom raising te lack oI autority as a deIense to a breac oI K
suit by te %
4 Rule
II proprietor does not exercise reasonable care and an imposter agent
swindles a customer, ten te proprietor is liable.
4 lements
P`s intentional or negligent acts
O Including acts oI omission
2 on wic a % reasonably and in good Iait relied
and suc reliance resulted in a detrimental cange in position on te
part oI %
O ange in position % paid te imposter agent wit cas. %is created
a cange in position Irom a K to buy Iurniture to estoppel.
Agency generally R2d

4 ase 44s r4s.
Woman paid money Ior purcase oI Iurniture to an imposter salesperson. P
cannot use imposter`s lack oI autority to escape liability.

O Agent`s Liability on the K

4 Rule An A is liable Ior debts incurred by is P iI a % party does not know te P`s
identity
A party to transaction iI P undisclosed.

4 Note
does not matter iI discovery oI P available troug public records
partially disclosed P generally applies same rule

4 ase 9lan9ic Sal24n
D purcased imported salmon Irom P. P did not know principal`s identity
and eld D liable because no principal could be Iound.



Liability oI P to % in %ort (generally, innocent % is given more leg room)

O $ervant v nd5 Contractor
4 Note:
Rigt to control ow to acieve result v. no rigt to tell A ow to acieve
All servants are agents
Not all Indp. ontractors are agents

4 Factors:
.) %e extent oI master`s control
2.) engaging in distinct occupation/business
.) kind oI occupation (direction oI employer, or specialist w/o supervision)
.) skill required
.) wo supplies instrumentalities, tools, place oI work
6.) lengt oI time a person is employed
7.) metod oI payment (by te time or by te job)
8.) is work part oI regular business oI employer
9.) do parties believe tey are creating relationsip oI m/s
.) is P in te business





Agency generally R2d

4 Master $ervant (mployer/mployee)
Rule Respondeat Superior (needs to be in scope oI employment)
O Master liable Ior %orts oI its servants
4 %is relationsip exists wen te servant as agreed:
A.) to work on bealI oI te master AND
B.) to be subject to te master`s control or rigt to
control te 'pysical conduct oI te servant
4 Merely te rigt to exercise suc control
O Aka: te manner in wic te job is perIormed


4 nde5endent Contractor
Agent (-type independent contractor)
O Rule one oI agreed to act on bealI oI anoter (te principal) but not
subject to te principal`s control over ow te result is accomplised
4 Aka: te pysical conduct
Non-Agent (-type independent contractor)
O Rule one wo operates independently and simply enters into arms
lengt transactions wit oters.
4 Aka: receives orders Irom principal on te pysical conduct

ases










:2-le

O ontrol: yes
O P paid Ior
everyting
O business operations
under P`s control
O ar rolls away Irom
service station its
person
44;er

O ontrol: no
O Oil company ad no
control over details oI
worker`s day-to-day
operation
O ar catces Iire at gas
station
4lida Inn (Francise)

O ontrol: no
O Francise agreement
does not give
Holiday Inn
managerial control
over daily operations
O P slipped on a puddle
oI water on motel
Iloor
Agency generally R2d


O %ort Liability and A55arent Agency

4 Apparent Agency
Rule
O P wo represents A
4 ven iI K says not agent, its all about te Iacts
O auses % to justiIiably rely upon care/skill oI A
O Subject to liability to % Ior arm caused

4 Actual Agency
Rule Rigt to ontrol %est (Ior Irancise)
O II Irancise agreement goes beyond setting standards,
O Gives Irancisor rigt to exercise control oI daily o5erations
O Agency exists.

4 ase
iller ;. c4nalds C4r5.
O Jewelry in burger
O In Francise situations look to K.
4 'McDonald`s System oI absolute uniIormity
controlled everyting in daily operations
O Its all about te degree oI control

O $co5e of 25loy2ent

4 Rule Respondeat Superior (in R2d)
- %e employee must ave been engaged in work Ior te employer
O Wit a purpose to serve te master
2 - oI a type tat e was employed to perIorm,
- during work ours.

4 Factors Ior scope oI employment
%ime, place and purpose oI act
Similarity to acts wic te servant is autorized to perIorm
Weter te act is commonly perIormed by servants
%e extent oI departure Irom normal metods
Weter te master would reasonable expect suc act would be perIormed

4 xception:
Don`t Iorget about substantial deviation Irom te scope oI employment
O Ski resort case
4 ase
:she
Agency generally R2d

O Seaman returning to sip Irom drinking (Ioreseeable)
O %urns water valves and damages sip (Ioreseeable)
4 ven toug precise action could not be Ioreseen
4 %e risk tat seamen coming/going Irom sip migt cause
damage to dry dock is enoug to make it under scope oI
employment.
O Applied Reasonable Foreseeability test
4 .) iI arm Ioreseeable, P liable
gov insisted tat seamen stay on sip
4 2.) general public could ave done te same arm
4 .) conduct must relate to employment

anning
O D trew a ball towards ecklers in te stands, te ball Ilew trew te
wire net and it P.
O Witin scope oI employment.
4 rd party interIerence in employees duty

O $tatutory Clai2s
4 mployer liable Ior an employee`s violation oI statute
4 C4n4c4
Racial epitets made during employee`s autorized duties are witin scope
oI employment. mployee liable.

O Liability for %orts of nd5 Contractor

4 Rule Person not liable Ior negligent acts oI independent contractor
ce5tions:
O .) landowner retains control oI te manner and means oI te doing oI
te work wic is te subject oI te K
4 could be indpt contractor Ior some purposes and servant Ior
oters
O 2.) were e engages an incompetent contractor
O .) were te activity contracted Ior is inerently dangerous
4 an activity were:
carried on saIely by exercise oI special skill and care
involves grave risk oI danger to persons/property iI
negligently done
4 ase
afes9ic Real9
O Accidentally demolised te wrong building in a building-crowded
area oI NY.
O Didn`t take proper precautions. So main guy still eld liable Ior te
negligence oI independent contractor.
Agency generally R2d


Fiduciary Obligation oI Agents

O Duties During Agency

4 Rule
An A is carged wit te Iiduciary duty of loyalty
O wic includes te duty not to compete wit P
Anyting tat an A obtains as a result oI is employment belongs to te P
O No secret proIits, advantages and beneIits absent P consent

Disgorgement: Any beneIits received by te agent wic can be said to arise
out oI te agency relationsip or by virtue oI te agency relationsip, Irom
watever source derived, must be paid over to te P.
4 Spotter:
.) Secret ProIits
2.) Acting Ior OR as an adverse party
.) Abuse oI position |reading|
.) Usurpation oI Opportunities |singer|

4 ases
Reading a sergeant in te army smuggled goods into cairo witout it being
inspected, made uge proIits because oI is station. %e crown conIiscated
te money.

Singer - A saw tat P couldn`t keep up wit orders, so A took orders upon
imselI and made some proIit. A owed a Iiduciary duty (via K) to P to not
compete. A sould ave just asked P iI e could take tese orders on imselI.
P received all proIits Irom A`s side business.

O uties after %er2ination of Agency (Grabbing and Leaving)
4 Rule
mployee owes Iiduciary duty to mployer Ior mployer`s trade secrets
O ven aIter employment as been terminated
4 ase
%4wn & C4:n9r
O lean up crew Ior te ric.
4 A Iew guys started a competing business and literally stole te
customers at a more competitive price (Irom Iormer employer)
And stole ONLY employers customers (didn`t get new
peeps)
O %rade secret ere: created a nice market, a Iormula, to solicit a
speciIic demograpic wo would pay $ Ior te clean up service.