1. Introduction to Agency and Business Organizations
Chapter 1
Introduction to Agency and Business Organizations

2. Agency Concepts & Definitions
Agent –the person authorized by the principal to act with third parties on the principal’s behalf
General-an agent authorized to transact all business of the principal or employment of particular nature
Special-an agent employed to conduct a particular transaction or piece of business for his/her principal or authorized to perform a specified act
Principal-an employer or anyone else who has another an agent do things for him/her
See examples of page 2.

3. Master and Servant
Master-employer/principal
Servant-employee/agent
Independent Contractor –person who contracts with an employer to do a particular piece of work by his/her own methods and under his/her own control.
See factors on page 3-4.

4. Power of Attorney-a special type of agency created by a written instrument that authorizes another to act as one’s agent.
General POA-authorizes attorney in fact to act on behalf of the principal in all matters.
Durable POA-lasts as long as individual remains incapable of making decisions (usu. about health care)

5. Agency Creation Elements (1) consent of the parties
(2) capacity of the parties to act
No minors or no people of unsound mind
(3) no written agreement required
Rem: SOF
(4) no exchange of consideration required
(5) proper purpose
Purpose must be legal

6. Creating the agency relationship
(1) express agreement
Verbal or written
(2) implied agreement
Intent and actions
(3) conduct of the principal/agent
Apparent agency-principal intentionally or negligently causes a third party to rsbly believe that another individual is acting as the principal’s agent and the third party relies on that belief
(4) ratification –principal accepts the benefits derived from the agent acting on his/her behalf or otherwise affirms the conduct of an individual acting on the principal’s behalf
See example on page 9
(5) estoppel –agency created to prevent a loss by innocent persons

7. Agency Relationship An agent is a fiduciary.
Agent’s authority –agent’s power to act on behalf of the principal
Actual authority
Express authority
Implied authority
Incidental to express authority
Implied because of emergency
Apparent authority
Inherent agency authority

8. Agent’s duties to principal
Duty to perform
Reasonable care
Fiduciary duty
Duty to notify
Duty of loyalty
Remedies available to principal

9. Principal’s duties to the agent
Duty to compensate
Duty to cooperate
Duty of care
Indemnification –the principal must compensate or promise to compensate the agent for any damages incurred in the course of acting as agent

10. Principal’s Liability to Third Parties
The principal is liable for the acts of the agent.
Tort liability
Respondeat superior
Acts intended by the principal
Negligence or recklessness by the principal

11. Agent’s Liability to Third Parties
The agent is usually not liable if acting within scope of agency.
The agent may be liable for his/her own wrongdoing and torts committed by them.

12. Agency Termination Expiration of agency term
Fulfillment of agency purpose
Death or incapacity of principal or agent
Change in circumstances-impossibility of performance
Act or agreement of the parties
Renunciation by agent
Revocation of authority by principal
Termination of apparent authority

13. Agency and Business Organization
Sole proprietorships
General partnerships and limited liability partnerships
Limited partnerships and limited liability limited partnerships
Limited liability companies
corporations

14. The Paralegal’s Role See corporate paralegal profile on pages 23-24.
See ethical consideration on page 24.

15. Resources
Agency treatises
Online agency law resources