Brown: Legal Terminology, 5 th ed. © 2008 Pearson Education, Upper Saddle River, NJ All Rights Reserved. Legal Terminology Fifth Edition by Gordon W. Brown PowerPoints prepared by Kimberly Lundy

Brown: Legal Terminology, 5 th ed. © 2008 Pearson Education, Upper Saddle River, NJ All Rights Reserved. Chapter 21 Law of Agency

Brown: Legal Terminology, 5 th ed. © 2008 Pearson Education, Upper Saddle River, NJ All Rights Reserved. Agency Relationships oPrincipal/Agent – one person (agent) authorized to act on behalf of and under control of another person (principal). nPerson with whom agent deals is third party. nUndisclosed principal – when third party deals with agent but is unaware of agency relationship.

Brown: Legal Terminology, 5 th ed. © 2008 Pearson Education, Upper Saddle River, NJ All Rights Reserved. Agency Relationships oEmployer/Employee – one person (employee - formerly known as servant) performs services under direction and control of another (employer – formerly known as master). oEmployer/Independent Contractor – perform services for employer but are not under their control.

Brown: Legal Terminology, 5 th ed. © 2008 Pearson Education, Upper Saddle River, NJ All Rights Reserved. Kinds of Agents oGeneral Agent – authorized to conduct all of a principal’s activity. oSpecial Agent – authorized to carry out a single transaction or a specified act.

Brown: Legal Terminology, 5 th ed. © 2008 Pearson Education, Upper Saddle River, NJ All Rights Reserved. Consignment oGoods sold on consignment - left by consignor (bailor) with consignee (bailee) for sale. nFactor – bailee to whom goods are consigned. nIf factor sells goods and guarantees buyer will pay, factor becomes a del credere agent.

Brown: Legal Terminology, 5 th ed. © 2008 Pearson Education, Upper Saddle River, NJ All Rights Reserved. Authority of Agents oExpress authority – authority given explicitly (oral or written). oPower of attorney – a formal writing authorizing an agent to act for a principal. nAgent is known as attorney in fact.

Brown: Legal Terminology, 5 th ed. © 2008 Pearson Education, Upper Saddle River, NJ All Rights Reserved. Authority of Agents oImplied authority – authority to perform incidental functions reasonably necessary to purpose of agency. oApparent authority – principal makes it seem as if agent has authority where none exists. nCreates an agency by estoppel.

Brown: Legal Terminology, 5 th ed. © 2008 Pearson Education, Upper Saddle River, NJ All Rights Reserved. Authority of Agents oAgency by ratification – where agent acts without authority but principal subsequently approves the act.

Brown: Legal Terminology, 5 th ed. © 2008 Pearson Education, Upper Saddle River, NJ All Rights Reserved. Failure to Act Properly oAgents may fail to act properly in three ways: nMisfeasance – improper doing of an act. nMalfeasance – doing an act that ought not to be done at all. nNonfeasance – failure to do an act that ought to be done.

Brown: Legal Terminology, 5 th ed. © 2008 Pearson Education, Upper Saddle River, NJ All Rights Reserved. Vicarious Liability oVicarious liability – holds principals and employers responsible for the torts of their agents and servants under the doctrine of respondeat superior. oThe wrongdoings of agents and servants are imputed (charged) to the principal.