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AGENCY OUTLINE AGENCY RELATIONSHIP AGENCY BASICS A. “Rsmt §1:” (1)Agency is a fiduciary relation which results from the manifestation of consent by one person to another that the other shall act on his behalf and subject to his control , and consent by the other to so act. (2)The one for whom action is to be taken is the principal. (3)The one who is to act is the agent. B. “Elements of Agency:” 1. “Acts on Behalf of the Principal:” The acting party must be acting “on behalf of” the principal in order to create the special powers and liabilities that accompany the agency relationship. a. A paid agent is considered to be primarily acting for the benefit of another, even though he receives a benefit in the form of compensation. b. Merely benefiting another by one’s conduct is not enough; an agent must be acting primarily for the benefit of the principal. 2. “Subject to Control of Principal:” Issue of control often comes down to the right of control. a. Often described as subservience. ( Ahn ) b. Control can be malleable and the issue becomes particularly relevant when “on behalf of” is questionable. c. Courts look to the totality of circumstances in determining control element. d. “Business:” An agency relationship does not exist every time one party has a contractual right to control some aspect of another party’s business. ( Hunter Mining ) 3. “With the Consent of the Principal:” The consent of both parties is a required element of the agency relationship. a. Consent can exist even when the parties involved fail to recognized that they have created an agency relation. ( Rsmt. §1 comment b ) b. Consent can be implied as well as express. ( Sears ) c. Infrequently addressed by courts. C. “Proof of Agency:” Whether or not an agency relationship exists is typically a question of fact, but if facts are not in dispute courts may decide question as one of law. 1
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D. “When can an agent be used:” Unless prevented by public policy, a statute, or a contract requiring personal performance, what a person can lawfully do himself, he can do through an agent. ( Mays ) C. “Themes to keep in mind:” 1. “Agency is a fiduciary relationship:” If one is a fiduciary to another, the fiduciary owes duties to the beneficiary. A Fiduciary is a person who has a duty, created by his undertaking, to act primarily for the benefit of another in matters connected with his undertaking. ( Rsmt. §13 ) a. Duty of care. i. Under ordinary circumstances, the promises to act as an agent is interpreted as being a promise only to make reasonable efforts to accomplish the directed result. ( Rsmt. §377, comment b ) b. Duty of loyalty. 2. “Principal bears responsibilities:” If a person is an agent, the principal bears certain responsibilities for that agent. a.
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