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Chapter 14AGENCY AND THE EMPLOYMENT RELATIONSHIPAgency is created when a person or company (an agent) agrees to act for or in place of another person or company (the principal)Principal: creates authority in an agentAgent: receive authority (attorney in fact). Third partiesmake contractsor are involved in tortswith the agentResult: The principal is generally bound by the agent’s acts with a third party.could be a good thing or a bad thingex.) pizza delivery store: agent doing something for me. I am going to be responsible act of agentbound by contracts: liable for torts;possibility Universal agents: anything I can do someone can do for meWhat Mr. Hine doesGeneral power of attorneyWife= agent Wife can do anything: write checks, mortgage property As if the person is dealing with me. Wife does it for free-Gratuitous agent: See a lot of time children name parents= no pay. Corporation: has to have agentSole proprietor: only so much business can do by selfBring other people in to act on behalfMultiplicity Special agents:only does limited thing for me. Limited power of attorney : ex.) real estate transactionTom smith can close on 1,2,3 main streetAgency coupled with an interestSubagentsOpen store: new grocery store: hire general manager get ship running: higher shift manager, I’vegiven him authority to go delegate. Authority agent
How to create agency relationshipBy Agreement of the Parties-Oral or write: Durable power of attorney: I john Hine, name Mariah hine to serve as my agentImplied or Express Ratification by the PrincipalAfter fact accept actionsList car for sale 9k out of town roommate answers. I was going to give 8500. Roommate says sold care-not bound – ratify by acceptingsalience can ratify action (implied by actions)Agency by EstoppelNo agency there. Don’t stop themKnew they were doing it- bound by itAgency by Operation of LawGrocery store cashier goes to Home Depot Oh thanks not going to repay theyBut get to act on behalfActual & Apparent AuthorityActual: Deal with agent:Expressedor impliedPrincipalsends signals to the agent to do something with a third party.Express Authority:Oral or written instructions create the authority.Implied Authority:Principal’s conduct or trade customs create authority.Apparent: do then think Tom Smith is acting for JohnAppearance but may not existPrincipal sends signals to the thirdpartythat what the agent does binds the principal.There is appearance of authority that a third party could reasonablyconclude.
Cove Management v. AFLAC, Inc.Agreement with Aflac- do not have authority to bind leaseExpress authority says you can’t do this. Law suit; Cove management suesFrom Aflac actions does it see Galvano have authorityCove appeals= lot of stuff Galgano can act on behalfOffice set up = symbol & duck Aflac- directory of building: signed lease first then Aflac stuff happensApparent authority= NONECourt said okay, what happened before lease: Galgano said I can do this which means heis a liar.