Agency Law OBE 118 Fall 2004 Professor McKinsey The first step in understanding employment law is understanding what an agent is. Agency law also complements our understanding of both contract law and the laws of business organizations.

Agents An Agent is an authorized representative who has the authority to make decisions or create obligations for someone else who is called the Principal –Cashiers –Managers –Buyers and sellers The key to correctly identifying agents is often to look for the authority they are given or have. –Authority should be rooted in transactions or obligations

Creating Agency Relationships Agency by Agreement (express agency –Mutual agreement, agency rooted in contract law Agency by Ratification (after the fact agency) –A principal can agree to accept the decision a person made supposedly on their behalf. Agency by Estoppel (implied agency) –A principal can be estopped from denying an agency relationship because of behavior and treatment consistent with agency

Agency by Estoppel An equitable doctrine founded in fairness False agency claim by person Third party believes that person is agent Principal acted in way to cause belief

The Duties of Agents Performance Obedience Loyalty Notification Accounting

The Duties of Principals Compensation Safe Working Conditions Cooperation Reimbursement Indemnification

Authority of Agents Express Implied Apparent Authority that is customarily associated with agency or necessary for expressly authorized tasks Agency by estoppel creates authority by estoppel or “apparent” authority

Contract Obligations Fully disclosed principal Undisclosed principal Agent is directly liable to third party Agent is not liable, principal is Partially disclosed principal Agent and principal are liable to third party

Torts by Agents (and employees) Doctrine of respondeat superior Authorized time and space Wrongful acts of an employee or agent on the job and within the scope of employment create liability for the principal or employer Authorized type of work Event caused in part by purpose of principal or employer Detour versus Frolic