Agency- Lowenstein- Spring 2007- Alexander 96

Agency- Lowenstein- Spring 2007- Alexander 96 - Agency...

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Agency Elements – R.2d §1 Assent – usually based on K. But may be implied from conduct (e.g., failure to object when a course of conduct is proposed that was previously undertaken in an agency capacity – MD Associates – picking up mail for P for a while, infer consent on present occasion) o Can be gratuitous On Behalf – “primarily for P’s benefit.” Must be ordering P’s affairs. Not enough that P benefits from A’s actions (Landlord w/share of profits Skewer ). Ask if we would expect fiduciary duty here. Control – element of subservience. Assent to right of control (in a general way). Look for context Question of fact – burden on one asserting relationship Distinguished from Following Relationships : A seller is not an agent : An agent sells on behalf of another; a seller sells on its own behalf. o Scenario : A transfers asset to B and K’s for some control over the actions of the B (e.g., manufacturer/distributor ). Factors will be : (1) Does A retain title; (2) Does A set prices; (3) Does B have return privileges for unsold goods A creditor may become a P if he engages in trade with the debtor and bargains for a stronger trade position as CNS for the loan. If the creditor assumes substantial affirmative control, particularly the right to initiate transactions , he can be P and liable for losses incurred by business – Peyton (in relation to P’ship). o Cargill – agency found without right to initiate (primarily because of right of first refusal on grain had a grain source = on behalf), but probably wrong. An escrow holder is not an agent during escrow period, but becomes one if escrow succeeds or fails . o If there is no K between all the parties, then not an escrow holder. o If an P delivers property to A, with a command to deliver to T upon performance he is an A for P only and no liability of A to T. o But a may be liable under 3 rd party beneficiary when: (1) K between P and A is intended to benefit T or (2) K between P and A is for discharge of a single obligation – King A franchisee is not an agent – no on behalf of A spouse is not an agent Property: (1) Co-owners are not agents, unless independent evidence of consent; (2) Landlord-Tenant – A T making improvements is not an A, even if owner knows and acquiesces (some courts: if required by lease then yes) Corporation: (1) Directors – not agents bec. no control by shareholders ( power to remove NOT enough for control); (2) Officers – are agents of corp because are subject to control of board of directors Complex Agency Relationships - When A is employed by two others: on whose behalf is the agent acting? The nature of the work being done is an indication. Frequently comes up in administration of group insurance by employer, when employer messes up, who’s responsible? This is w/ knowledge of parties ; dual agency rule is w/o Courts split on this issue : (1) an employer is an agent of employee bec. advocates on his behalf, has interest adverse to insurer - Kilborn ; (2) is an agent of the insurer bec. assumes clerical duties on behalf of insurer
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