BUSINESS LAW

What is agency law? Legal relationship where one party has legal permission to act for another party Two primary parties are “agent” and “principal” Agency – person who acts on behalf of another Principal –person who gives authority for another to act on their behalf

Types of Agency Special Agents Very limited authority, can only conduct actions for one specific purpose directly stated in agent-principal agreement General Agents More authority than special agents, but less authority than universal agents Authority to conduct ordinary business Universal Agents Unlimited authority, can conduct almost all business for the principal (rare occurrence) Usually appointed by the power of attorney

Agent Type Examples Special Agent A real estate agent who normally sells houses, is appointed to sell furniture within a house but not the actual house General Agent Traveling salesman, who has authority to conduct normal business transactions on behalf of a business Universal Agent While principal is traveling overseas, agent can have authority to sell/manage property

Types of Principals Disclosed Agent acts on behalf of principal and person that the agent is conducting business with knows the agent is acting for another and knows who the agent is acting for Partially Disclosed Agent acts on behalf of the principal but never informs others of the identity of the principal Undisclosed Agents acts on behalf of the principal but never acknowledges the fact that they are acting for another or the identity of whom thy are acting for

Duties an Agent Owes to Principal Act of behalf of principal Act with care and diligence Avoid conflict between personal interests Act ethically with third party connection Act only within their authority Act reasonable and avoid any conduct likely to damage principal & their enterprise

Duties Principal Owes to an Agent Pay agent as agreed upon Protect agent against claims, liabilities, and expenses incurred by agent requests

Liability to 3 rd Parties Agent may be liable to third parties if they misrepresent their authority Principals are liable to third parties for: Contracts made by the agent Contractual nonperformance

Power of Attorney Legal document that you, the principal, create to give another person, the agent, the legal authority to act for you Often used to for handling finances, medical decisions, parental rights Power of Attorney may not represent you in court or change/create certain documents such as your will

Employer Hiring Responsibilities Employers are required to verify a new hires identity and also verify their eligibility to work To verify a I-9 for is completed an kept on file by the employer The I-9 is an employment eligibility verification form Employers are responsible to ensure that I-9 form is filled out completely and in a timely manner for all new hires I-9 Form:

National Labor Relations Board Agency with the purpose of protecting employees’ rights to organize and have unions to bargain with employers Prevents unfair labor practices and tries to solves any unfair labor practice that occurs

Employee Contract Clauses Non-competition clause Agreement between employer and new employee when employee begins to work for employer Takes effect after the employer/employee relationship has ended Employee cannot be involved within industry after they leave company and employee often gains something in return Possible purpose of protecting trade secrets Often does not hold up in court as it limits employees earning potential Confidentiality Agreement Protects valuable information that businesses do not want other companies/people to know of Common uses are for sales plan, customer lists, formulas for products, design of products (common for manufacturing, and high-tech field) Gives company legal grounds to pursue lawsuit if agreement is broken