93%(14)13 out of 14 people found this document helpful
This preview shows page 1 - 3 out of 18 pages.
Chapter 31Agency Formationand DutiesSee Separate Lecture Outline SystemINTRODUCTIONUp to this point, most of the material has considered when a person may be liable for something that heor she did. With this chapter, the text goes a step further to ask when and under what circumstances a personmay make another person liable. That is, when can the actions of an agent bind a principal? As importantly,when does the law consider a person an agent?One of the most common, important, and pervasive legal relationships is that of agency. In an agencyrelationship between two parties, one party (the agent) agrees to represent or act for the other (the principal).A principal has the right to control an agent’s conduct in matters entrusted to the agent. Generally, the law ofagency is based on the maxim that “one acting by another is acting for himself.”ADDITIONAL RESOURCES—AUDIO & VIDEO SUPPLEMENTS105
106 INSTRUCTOR’S MANUAL TO ACCOMPANY BUSINESS LAW, ELEVENTH EDITIONThe following audio and video supplementsrelate to topics discussed in this chapter—PowerPoint SlidesTo highlight some of this chapter’s key points, you might use the Lecture Review PowerPoint slidescompiled for Chapter 31.South-Western’s Business Law Video SeriesThe situational video Employment Law illustrates some of the material included in this chapter.CHAPTER OUTLINEI.Agency RelationshipsAn employee or an independent contractor may act in the capacity of an agent.A.EMPLOYER-EMPLOYEE RELATIONSHIPSAn employee is one whose physical conduct is controlled, or subject to control, by an employer. Thekey feature is the employer’s right to control the employee in the performance of tasks involved inthe employment. An employee can be an agent if the employee has an appointment or contract forhire with authority to represent the employer.ADDITIONAL BACKGROUND—Restatement (Second) of Agency, Sections 2, 14N, 25According to the Restatement (Second) of Agency employees are always agents. The following is the textof the Restatement (Second) of Agency, Sections 2, 14N, and 25 with selected comments.§ 2. Master; Servant; Independent Contractor(1) A master is a principal who employs an agent to perform service in his affairs and who controls orhas the right to control the physical conduct of the other in the performance of the service.