Badm 300 Exam 3 Study Guide

AGENCY LAW: PRINCIPAL-AGENT RELATIONSHIP 1. Agency a. Principal tells an agent what to do, they create an agreement b. Created by a contract – manifestation of consent c. Why care about agency law? Lawyer - agent and employer - principal d. There’s a liability on the employer on the actions of its employee e. If you’re an employee, and you run into a pedestrian who gets injured – pedestrian will sue the company not employee (deep pockets) torts f. Contract – guy work for trucking company signs contract to transport good, if contract is breached will be the responsibility of principal 2. Parties Involved g. Principal contracts with Agent to perform some service i. E.g. Principal, homeowner, hires Agent, landscaping company, to landscape his yard h. In a lot of cases, there is also a third party involved ii. E.g. Landscaper’s mower goes out of control, into neighbor’s yard * Neighbor becomes 3rd party 3. Fiduciary Obligations i. Fiduciary - One who is entrusted with duties on behalf of another. The law requires the highest level of good faith, loyalty and diligence of a fiduciary, higher than the common duty of care that we all owe one another. iii. Principal manifests ascent to an agent to make decision iv. Restatement – document/book that adds additional commentary to laws, definitions) j. The Agent has Fiduciary Obligations to the Principal; they must act in the Principal’s best interest k. Duties that fall under this category v. Duty of Loyalty – Agent must act solely for the benefit of Principal regarding matters within the scope of the agency * The Agent must not compete with the Principal vi. Duty of Service – The Agency must render service to Principal vii. Duty of Obedience – The obligation to obey all