contracts ppt - Contracts The Principal's liability for...

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Unformatted text preview: Contracts The Principal's liability for contracts entered into by his/her Agent Disclosed Agency If Agent has authority to act on behalf of Principal in this instance, then Agent is not liable for breach of contract and only Principal is liable for breach Undisclosed Agency Risk to the agent of personal liability International Comparison on Agency: European Union Law The European Union Commercial Agents Directive applies to all European Union (EU) nations It automatically applies to some terms and protections to commercial sales agents regardless of some terms and protections to commercial sales agents regardless of what the agent's agreement with the manufacturer states Master/Servant Relationship It is a highly controlled form of employment The master exercises over the servant control of all important areas Independent Contractor Both employees and independent contractors may or may not be agents Agents can be anywhere along the continuum An agent has authority to bind An agreement may specify that party is an independent contractor and may also indicate that the party is not an agent Right to Control Test Focuses on the right to control rather than the actual exercise of that control The "right to control" is determined by considering these traditional agency law principles: 1. Whether the worker is engaged in a distinct occupation or business 2. Whether the work involved is usually done under an employer's discretion or by an unsupervised specialist 3. The degree of skill involved 4. Who supplies the instrumentalities, tools, materials, and place of performance 5. The length of employment 6. The method of payment 7. Whether the work is part of the employer's regular business and/or is necessary to it 8. The intent of the parties creating the relationship 9. Who designates the time and place at which work is to be done 10. The right to hire and fire Economic Realities Test Uses lots of factors Tort Liability of Hirer Unlike an employer's vicarious liability for the negligence of an employee, ordinarily, a hirer is not liable for his/her independent contractor's actions The exceptions are: (1) Public Policy (2) (2) Negligent Hiring Agent's Duties to Principals 1. 2. 3. 4. 5. 6. To obey instructions To act with skill To avoid conflict of interest of loyalty To protect confidential information To notify To account Fiduciary May hold items in trust, otherwise act on behalf of the dependent party Loyalty A most important, fundamental duty) involves: (a) Protection of confidential information (b) Noncompetition (c) Refusal and/or disclosure of gifts or favors received within role as agent Obedience Much more obedience is expected from Employee-agents than from Independent Contractor agents Reasonableness The agent should not sub-agent any personal duties without principal's approval Agent's Powers on Behalf of Principal To do most legal tasks as an Agent ...
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