What is Commercial law? Commercial law, also known as business law, is the body of law that applies to the rights, relations, and conduct of persons and businesses engaged in business, buying, trade, and sales. It is often considered to be a branch of civil law and deals with issues of both private law and public law. New Merchant law/ N.C.law?? In 1986, the European Communities enacted Directive 86/653/EEC on self-employed commercial agents. In the UK, this was implemented into national law in the Commercial Agents Regulations 1993. In India, section 182 of the Contract Act 1872 defines Agent as “a person employed to do any act for another or to represent another in dealings with third persons” .

By Karwan Dana Ishik University Agents and Employees The first step in understanding employment law is understanding what an agent is. Agency law also complements our understanding of both contract law and the laws of business organizations. By Karwan Dana Ishik University

Agent versus Employee? As we study agency, keep in mind that an employee might or might not be an agent. As we study employment law we will compare employees to independent contractors. Independent contractors might also, or might not be, agents.

AGENCY: CREATION AND TERMINATION. AGENCY LAW AND AGENCY RELATIONSHIPS Agency law concerns relationships between employees and employers. Agency law involves duties/responsibilities to each other, and the public at large. Agency law places significance reliance on state law and precedent.

At-Will versus Contract Employees An “at-will” employee can be terminated at any time for “any” reason Even if an employee is called an “at-will” employee, however, there are various things that an employer can do that could create some degree of protection against termination.

Creation of Agency A person who has capacity to contract can enter into contract either by himself or though some other person. If he adopts the first method there is no question of agency. If he adopts the second method, then there is agency. The person who represents another in his dealing with third parties is called agent and that person who is so represented by agent is called principal. The following are different modes of creation of agency. 1. Agency by Express agreement. 2. Agency by Operation of law. 3. Agency by Ratification. 4. Agency by Implied authority.

Creating Agency Relationships Agency by Agreement (express agency) Mutual agreement, agency rooted in contract law Agency by Ratification (after-the-fact agency) A principal can agree to accept the decision a person made supposedly on their behalf. Agency by Estoppel (implied agency) A principal can be estopped from denying an agency relationship because of behavior and treatment consistent with agency

An equitable doctrine founded in fairness Agency by Estoppel An equitable doctrine founded in fairness False agency claim by person Third party believes that person is agent Principal acted in way to cause belief

In order to prove agency by estoppel, the following elements must be established: (1) intentional or negligent acts of commission or omission by the alleged principal which created the appearance of authority in an agent; (2) reasonable and good faith reliance on the appearance of authority in the putative agent by the third party; and (3) a detrimental change in position by the third party due to its reliance on the agent's apparent authority.

AGENCY RELATIONSHIPS Restatement explains key terms: Agency is a fiduciary relationship resulting from agreement of one person to another that the other shall act on his/her behalf. Principal one whom action is taken for. Agent one who is to act. Agency relationship is consensual in nature. Based on concept that parties mutually agree: Agent will act on behalf of principal. Agent will be subject to principal’s direction and control. Agreement can be expressed or implied.

TYPES OF AGENCY RELATIONSHIPS General and Special Agents. Special agent: employed to complete one transaction or simple series of transactions, the relationship covers limited period and is not continuous. General agent: conduct series of transactions, has more discretion to carry out employers’ business. Factors that determine agent’s status: Number of acts agent must complete to obtain an authorized result. Number of people that must be dealt with. Length of time necessary to obtain the desired result.

DUTIES OF THE AGENT TO THE PRINCIPAL Agent must protect interests of principal. Requires agent to perform certain duties: Duty of Good Faith (a fiduciary duty). Duty of Loyalty. Duty to Obey All Lawful Instructions. Duty to Act with Reasonable Care. Duty to Segregate Funds. Duty to Account for Funds. Duty to Give Notice .

DUTIES OF THE PRINCIPAL TO THE AGENT Principal duties may be specified in the contract between principal and agent. Safe Working Conditions In general, principal has following obligations to the agent: Pay agent per the agreement. Maintain proper accounts so compensation and reimbursement will be correct. Provide agent with means to do the job. Continue employment for time period specified.

Fully Disclosed principal Contract Obligations Fully Disclosed principal Agent is not liable, principal is Exception?... Corporation promoters Undisclosed principal Agent is directly liable to third party

Torts by Agents (and employees) Doctrine of respondeat superior Wrongful acts of an employee or agent on the job and within the scope of employment create liability for the principal or employer Authorized type of work Authorized time and space Event caused in part by purpose of principal or employer Detour versus Frolic

TERMINATION OF THE AGENCY RELATIONSHIP Agreement of Parties. Contract between principal and agent state when it will end. Agency at Will. Terminable at any time by either party after notice. Fulfillment of the Agency Purpose. Completion of work terminates Revocation. Principals revoke authority of agents to act on their behalf. Renunciation. Agent notifies principal they quit.

TERMINATION OF THE AGENCY RELATIONSHIP by law Operation of Law. Termination occurs automatically: Upon death of agent or principal. Either party becomes senseless. Principal becomes bankrupt. Agent becomes bankrupts, if bankruptcy affects the agency. Agency cannot be performed. Unforeseen events destroy the agency relationship. Change in law makes agency illegal.

TERMINATION OF THE AGENCY RELATIONSHIP Importance of Notice. Early termination by either party, except by operation of law, requires notice. Actual or constructive notice may be acceptable. Breach of Agency Agreement. If principal wrongfully revokes agent’s authority, agent can sue for breach of express or implied contract.

At-Will versus Contract Employees An “at-will” employee can be terminated at any time for “any” reason Even if an employee is called an “at-will” employee, however, there are various things that an employer can do that could create some degree of protection against termination.