The domain is for sale!
contact: craig AT

Agency In Law

Updated 2008-04-24 19:04

Agency Relationships

A relationship between two parties in which one party (the agent) agrees to represent or act for the other (the principal).


Question Answer
PrincipalMaster or Employer
AgentServant or Employee

Two Types of Agency

Master/Servantlevel of supervision, level of control, nature of work, regular hours/pay, length of employment
Independent ContractorHired for a task, little control

Agency Formation

ExpressWritten or Oral
ApparentCreated by Acts of Principal (principal is allowing somebody to act in a way that a third party thinks they are working for the principal a.k.a. Agency by Estoppel)
RatificationAgency after the fact (they are not your agent and you don't know them, but they do the work and put together a deal and then bring the deal to you {this is dangerous, and you should investigate to be sure they didn't do anything wrong while coming up with this deal, or you could be liable})

Agent's Responsibilities

Loyaltyyou can only work for one side of the deal, you have to pick a side.
Obedienceyou cannot make money on a deal when you're working for the principal (no money on the side)
Notificationyou have to do the job the way the principal tells you, unless it's illegal, and you have to tell the principal about important information about the company/deal
Accountingyou have to account to the principal for money and inventory
Performanceyou have to do your job to the best of your ability

Principal's Responsibilities

Payself explanitory (only exception - Gratuitous Agency a.k.a. volunteer work)
Cooperatemust give directions on how job is to be done.
Reimburse & IndemnifyPay for extra monies spent in completing the job (ie. tolls, etc.), and Pay if you screw up and you/they get sued.

Agent's Authority

The agent acts as you, but you diliniate how much authority they have in your stead.
ExpressWritten or Oral
ImpliedExtension of Express authority, authority that goes along with the job title.
ApparentCreated by Acts of Principal (the principal hasn't expressed it, it's not implied, but you're still doing it and the boss allows it and a third party witnesses the boss allowing the action)

Contract Liability of Principal for Acts of Agent

Liability is the same for servants as for independent contractors.


Disclosed Principalthey disclose they are working for the principal and identify them
Partial Disclosed Principalexample: the agent is told to buy baseball bats, but not to mention the principal. (if the principal doesn't pay, the seller can sue the agent and the principal)
Undisclosed Principalexample: the agent is told to buy baseball bats, but to act as if they themself are the principal "don't tell them about me at all"

Tort Liability of Principal for Acts of Agent

Liability is different for servants and independent contractors
Tort Liability
Respondeat SuperiorLatin for "Let the Master Respond", the master is liable for the servant's wrongful acts while acting in the scope of their agency/employment.
Master/ServantDuring Scope of Employment, Not During Frolic (master is responsible for the torts of their agent during the scope of employment)
Indepenent ContractorThe principal IS NOT responsible for the torts of an I.C. EXCEPT for: Inherently Dangerous Activity (ex. explosives), Neglient Hiring (ex. hiring a sex offender to be a dorm security guard)

Termination of Agency

Question Answer
Action NeededGive Public/Constructive Notice, or Private Written Notice


Question Answer
Lingering Apparent AuthorityWhen you fail to give the above

At-Will Employment

Almost all jobs in the U.S. are At-Will Employment


Question Answer
Fire/Quite at WillWithout Notice, and there is no recourse

Exceptions (to no recourse for At-Will Employment)

Question Answer
Implied Contracts(ex. Manuals, unless it has specific writing noting the "manual has no contractual obligations"
Whistle-Blowerif an employee reports bosses for breaking a statute, the Whistle-Blower exemption must be named in the statute
Descrimination(self explanitory)