BL-Chapter 30 - 1 CHAPTER 30 LIABILITIES OF PRINCIPALS AGENTS AND INDEPENDENT CONTRACTORS Agents Duty of Loyalty Fiduciary duty not to act

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CHAPTER 30 LIABILITIES OF PRINCIPALS, AGENTS, AND INDEPENDENT CONTRACTORS Agent’s Duty of Loyalty Fiduciary duty not to act adversely to the interests of the principal. Common breaches 1. Self-dealing 2. Usurping an opportunity 3. Competing with principal 4. Misuse of confidential information 5. Undisclosed dual agency Tort Liability to Third Parties Principal and agent each personally liable for their own tortious conduct. Principal liable for tortious conduct of agent acting within the scope of authority. Agent liable for tortious conduct of principal only if agent directly or indirectly participates in or aids and abets the principal’s conduct. Scope of Authority Was act specifically requested or authorized by principal? Was it kind of act agent employed to perform? Did act occur within time period of employment? Did act occur at place of employment? Was agent advancing principal’s purpose? 1
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-Where liability is found tort remedies are available that include medical expenses, lost wages, pain and suffering, emotional distress, and in some cases punitive damages -The three main sources of tort liability are negligence, intentional torts, and misrepresentation Negligence Principals liable for negligent conduct of agents acting within the scope of their employment. Principal derives benefits from acting through agent, and therefore should also bear liability. Liability based on the common law doctrine respondeat superior which is base on the legal theory of vicarious liability (liability without fault). The principle is liable because of he employment contract with the negligent agent, not because the principal was personally at fault The doctrine of negligence rests on the principle that if someone (principle) expects to derive certain benefits from acting through (agent), that person should also bear liability for injuries to a third persons Frolic and Detour Frolic and Detour-negligence acts stemming from an a agent doing something for their own interest Ex. Running an errand while on assignment Principal may not be liable. If the deviation is minor, the principal is liable for the injuries caused by the agent 2
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Ex. A employee who stops home for lunch while on assignment and hits a kid with his car. The principle would be liable if the agent’s home is not to far out of the way from the agent’s assignment. Coming and Going
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This note was uploaded on 04/21/2011 for the course BUS LAW 320 taught by Professor Soos during the Spring '10 term at Rutgers.

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BL-Chapter 30 - 1 CHAPTER 30 LIABILITIES OF PRINCIPALS AGENTS AND INDEPENDENT CONTRACTORS Agents Duty of Loyalty Fiduciary duty not to act

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