CHAPTER 24: BASIC PRINCIPLES OF AGENCY

Learning Objectives: General Agency Principles Duties of the Agent Duties of the Principal Termination:  By Operation of Law  By Parties’ Agreement Chapter 242 CHAPTER 24: BASIC PRINCIPLES OF AGENCY

1.Importance of Law of Agency to Business 2.Agent: Acts for another 3.Principal: Person for whom another acts Chapter 243 INTRODUCTION TO THE LAW OF AGENCY

1.Three Parties: Agent, Principal, Third Party 2.Types of Principals: a.Disclosed b.Undisclosed c.Partially disclosed Chapter 244 GENERAL AGENCY PRINCIPLES

3.Types of Agents a.Brokers and Factors b.General and Special c.Independent Contractors 4.Capacity of the Parties 5.Formal Requirements Chapter 245 GENERAL AGENCY PRINCIPLES

1.Nature of Agency Relationship: Fiduciary 2.Duty of Loyalty 3.Duty to Protect Confidential Information 4.Duty to Obey Instructions 5.Duty to Inform 6.Duty Not to be Negligent (Duty to Act Reasonably) 7.Duty to Account Chapter 246 DUTIES OF AGENT

1.Duty to Compensate a.General Duty b.Special Case: Sales Representatives 2.Duty to Reimburse 3.Duty to Indemnify Chapter 247 DUTIES OF PRINCIPAL

1.Death 2.Insanity 3.Bankruptcy 4.Destruction or Illegality of Subject Matter Chapter 248 TERMINATION BY OPERATION OF LAW

1.Mutual Agreement 2.Unilateral Action Chapter 249 TERMINATION BY PARTIES’ ACTIONS

CHAPTER 24: BASIC PRINCIPLES OF AGENCY