Business Association Outline
I. Agency (Chapter 1)
A. Who is an Agent
i. Agency Definition
Agency is a fiduciary relationship which results from the manifestation of consent by one person to another that the other shall act on his behalf and subject to his control and consent by the other to so act.
1. Contractual relationship is not necessary, nor do either need to receive compensation
2. Agent - the one to act
3. Principal - the one for whom action is taken
4. Agency means more than mere passive permission; it involves request, instruction, or command
5. Agency cannot exist when it is against public policy or illegal
6. Agency is like an enforceable contract (offer + acceptance) but does not require consideration
7. 3 Different forms of agency: (1) Principal-Agent; (2) Master-Servant; (3) Employee-Employer or independent contractor
8. Principal cannot delegate a non-delegable act ii. Allocation of risk and responsibility based on principals of agency
1. A way to get someone to act on behalf of another
2. Agency allows things to get done in a way that otherwise is not possible
3. Agents are force multipliers which allows a concentration of resources behind a collective purpose
Principal-Agent-Third Party (PAT) Triangle
1. Principal is typically the lowest cost avoider and in the best position to mitigate damages
2. Agent - one authorized to act for another
3. Third Party - what does this party "see"? would a reasonable person believe that the agent had authority to bind the principal
Gorton v. Doty
Facts: Gorton injured in an automobile accident after Doty loaned her vehicle to coach to transport Gorton and others to football game
ROL: An agency relationship results from one person's consent that another will act on his behalf and subject to his control and the other person's consent so to act
Gay Jenson Farms Co. v. Cargill, Inc
Facts: Plaintiffs entered into grain contracts with Warren Grain & Seed Co., which was financed and controlled by Cargill, Inc., a separate
A. Who is an Agent
i. Agency Definition
Agency is a fiduciary relationship which results from the manifestation of consent by one person to another that the other shall act on his behalf and subject to his control and consent by the other to so act.
1. Contractual relationship is not necessary, nor do either need to receive compensation
2. Agent - the one to act
3. Principal - the one for whom action is taken
4. Agency means more than mere passive permission; it involves request, instruction, or command
5. Agency cannot exist when it is against public policy or illegal
6. Agency is like an enforceable contract (offer + acceptance) but does not require consideration
7. 3 Different forms of agency: (1) Principal-Agent; (2) Master-Servant; (3) Employee-Employer or independent contractor
8. Principal cannot delegate a non-delegable act ii. Allocation of risk and responsibility based on principals of agency
1. A way to get someone to act on behalf of another
2. Agency allows things to get done in a way that otherwise is not possible
3. Agents are force multipliers which allows a concentration of resources behind a collective purpose
Principal-Agent-Third Party (PAT) Triangle
1. Principal is typically the lowest cost avoider and in the best position to mitigate damages
2. Agent - one authorized to act for another
3. Third Party - what does this party "see"? would a reasonable person believe that the agent had authority to bind the principal
Gorton v. Doty
Facts: Gorton injured in an automobile accident after Doty loaned her vehicle to coach to transport Gorton and others to football game
ROL: An agency relationship results from one person's consent that another will act on his behalf and subject to his control and the other person's consent so to act
Gay Jenson Farms Co. v. Cargill, Inc
Facts: Plaintiffs entered into grain contracts with Warren Grain & Seed Co., which was financed and controlled by Cargill, Inc., a separate