Ch. 28
Agency – a relationship between two parties in which one party agrees to represent or act for the
principal
•
Fiduciary – person having a duty to act primarily for another’s benefit in matters
connected with the undertaking
•
Employer-Employee relationships
•
Employer-Independent contractor relationships
o
Independent contractor – one who works for, and receives payment from, an
employer but whose working conditions and methods are not controlled by the
employer.
•
Determining employee status
o
Criteria used by the courts
o
Criteria used by the IRS
o
Employee status and “works for hire"
How agency relationships are formed
•
No writing requirements and no consideration needed
•
Agency by agreement
•
Agency by ratification
o
Ratification – the act of accepting and giving legal force to an obligation that
previously was not enforceable
•
Agency by estoppel
o
Appearance of an agency where third person reasonably believed relationship
existed
•
Agency by operation of law
Duties of agents and principals
•
Agent’s duties to the principal
o
Performance: Reasonable diligence and skill in performance
o
Notification: Of matters that come to attention concerning the subject matter
o
Loyalty: Act solely for the benefit of principal
o
Obedience
o
Accounting
•
Principal’s duties to the agent
o
Compensation: Agent expects payment
o
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- Spring '09
- RICKS
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