Agency SHORT- Lowenstein- 2006- Annonymous

Agency SHORT- Lowenstein- 2006- Annonymous - AGENCY AND...

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AGENCY AND PARTNERSHIP. Professor Lowenstein. AGENCY Parties’ characterization is not definitive. Elements—by contract or implication: o (1) Consent —two parts Principal appoints agent. Agent consents. o (2) On Behalf of Agent acts primarily for principal’s interests. Agent carries out principal’s affairs. o (3) Control Agent works under the control of principal. Subservience. o (4) Fiduciary Relationship —almost another element. Trust / confidence Loyalty Agency Distinguished From Other Relationships o Buyer-Seller If Title passes, difficult to show “on behalf of.” Even if lots of control by seller. Hunter Mining Lab . G.E. If buyer can compete with seller, difficult to show “on behalf of.” No agency if buyer acts as an independent business. o Debtor-Creditor Creditor that assumes de facto control may become principal. Cargill . o Franchise Franchisee does not act “on behalf of” franchisor. o Marriage Spouses do not necessarily act “on behalf of” each other. Control is problematic also. o Property Co-owners —SPLIT. Not agents, but partners. Consequence or partnership is agency. Lessor / Lessee —no. o Corporate Relationships Directors, i.e. Board of Directors, are not agents of the corporation. They have independent judgment for the best interests of the corp. Officers are agents. Subsidiary Corporation Corporation A (parent corp.) owns majority of shares of Corporation B. Establish agency by two methods: o (1) Show subsidiary as “mere instrumentality or “alter ego” of parent corp. o (2) Apply traditional agency doctrine for specific transactions. o Apply equities to avoid a “gross injustice.” Co-agency Principal has two or more agents Subagency Principal (original principal) appoints Agent (remote principal) who appoints Subagent. o Principal’s consent to subagency may be implied.
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Principal knows or has reason to know of subagent o E.g. Seller (principal) hires a listing agent (agent) who places the house with a multiple listing service. A selling agent (subagent) finds a buyer. Stortroen . Subagent is agent of (1) original principal AND (2) remote principal. o Liability—subagent’s liability is original principal’s and remote principal’s. o Notice—to subagent is notice to original and remote principal. Dual Agency Courts are slow to find dual agency. Dual agent must make full written disclosure with both principals. o E.g. Selling broker (agent) wants to represent the buyer (potential principal) but legally is already the subagent of the seller (principal.) Escrow Agent Exception o Agent for both parties. See Problem 4, page 71. E.g. Hard to argue that A acted as your agent, when A is already the agent of P; unless
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Agency SHORT- Lowenstein- 2006- Annonymous - AGENCY AND...

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