Agency Vs

Front 1

Gorton v. Doty, 69 P.2d 136 (Id. 1937)

Back 1

The relationship of principal and agent arises where one undertakes to transact some business or manage some affair for another by authority and on account of the latter.

Front 2

MJ & Partners Restaurant Limited Partnership v. Zadikoff, 10 F.Supp. 2d 922 (N.D.Ill. 1998)

Back 2

The existence of an agency relationship is determined based on the actual practices of the parties, and not merely by reference to a written agreement.

Front 3

Rose v. Giamatti, 721 F.Supp. 906 (S.D. Ohio 1989)

Back 3

An agency relationship does not exist if the putative principal places the agent beyond the scope of the principal’s control.

Front 4

Green v. H&R Block, Inc., 735 A.2d 1039 (Md. 1999)

Back 4

A “principal need not exercise physical control over the actions of its agent” so long as the principal may direct “the result or ultimate objectives of the agent relationship.”

Front 5

A. Gay Jenson Farms Co. v. Cargill, Inc., 309 N.W.2d 285 (Minn. 1981)

Back 5

A creditor who assumes control of his debtor’s business may become liable as a principal for the acts of the debtor in connection with the business. REST 2d AGENCY 14.

Front 6

Mill Street Church of Christ v. Hogan, 785 S.W.2d 263 (Ky. App. 1990)

Back 6

Agency can be established by circumstantial evidence including the acts and conduct of the parties such as the continuous course of conduct of the parties covering a number of successive transactions.

Front 7

Karl Rove & Co. v Thornburgh, 39 F.3d 1273 (5th Cir. 1994)

Back 7

A member of an association is personally responsible for a contract entered into by a nonprofit association only if, given a principal-agent relationship, the member as principal authorized, assented to, or ratified the contract.

Front 8

Lind v. Schenley Industries, Inc., 278 F.2d 79 (3rd Cir. 1960)(en banc))

Back 8

Inherent agency is a form of agency that comes with a kind of authority arising solely based on the designation by the principal of a kind of agent who ordinarily possesses certain powers.

Front 9

Three-Seventy Leasing Corporation v. Ampex Corporation, 528 F.2d 993 (5th Cir. 1976)

Back 9

A salesman with the apparent authority to bind his company to a sale can bind his company to a sale.

Front 10

Watteau v. Fenwick, [1893] 1 Queen’s Bench 346 (1892)

Back 10

To establish an agency in fact for an undisclosed principal, show that the agent’s conduct was within the reasonable scope of the agent’s authority.

Front 11

Kidd v. Thomas A. Edison, Inc., 239 Fed. 405 (S.D.N.Y. 1917)

Back 11

An agent’s authority can derive from customary practice, estopping a principal from disavowing the agent’s authority, even when the principal explicitly denies the authority to the agent.

Front 12

Nogales Service Center v. Atlantic Richfield Company, 613 P.2d 293 (Ariz. 1980)

Back 12

When inherent agency power is argued, liability does not turn on principles of torts, contract or estoppel, but rather because agents are fiduciaries acting generally in the principal's interests, and are trusted and controlled by him, so that it is fairer that the risk of loss caused by disobedience of agents should fall upon the principal rather than upon third persons.

Front 13

Botticello v. Stefanovicz, 411 A.2d 16 (1979)

Back 13

Neither marital status, nor joint ownership in land are themselves evidence of an agency relationship

Front 14

Ercanbrack v. Crandall-Walker Motor Company, Inc., 550 P.2d 723 (Utah Sup. Ct. 1976)

Back 14

Ratification of an act about which the principal knows nothing is inherently impossible.

Front 15

Hoddeson v. Koos Bros., 135 A.2d 702 (N.J. App. Div. 1957)

Back 15

The duty of a proprietor encompasses the exercise of reasonable care and vigilance to protect the customer from loss occasioned by the deceptions of an apparent salesman, but absent a representation from principal to third party, the imposter is not principal's agent.

Front 16

Trustees of the American Federation of Musicians and Employers’ Pension Fund v. Steven Scott Enterprises, Inc., 40 F. Supp. 2d 503 (S.D.N.Y. 1999)

Back 16

A principal may be estopped from denying apparent authority if (1) the principal's intentional or negligent acts, including acts of omission, created an appearance of authority in the agent, (2) on which a third party reasonably and in good faith relied, and (3) such reliance resulted in a detrimental change in position on the part of the third party.

Front 17

Atlantic Salmon A/S v. Curran, 591 N.E.2d 206 (Mass. App. Ct. 1992)

Back 17

It is the duty of the agent, if he would avoid personal liability on a contract entered into by him on behalf of his principal, to disclose not only that he is acting in a representative capacity, but also the identity of his principal.

Front 18

Humble Oil & Refining Co. v. Martin, 222 S.W.2d 995 (Tex. 1949)

Back 18

The terms of a contract can indicate a principal-agent relationship despite an express claim to an independent contractor relationship.

Front 19

Hoover v. Sun Oil Company, 212 A.2d 214 (Del. 1965)

Back 19

The test of whether a principal-agent relationship exists is whether the putative principal maintains control over the conduct of the purported agent.

Front 20

Murphy v. Holiday Inns, Inc., 219 S.E.2d 874 (Va. 1975)

Back 20

The regulatory provisions of a franchise contract, when they do not dictate control over day-to-day operations, do not constitute control within the definition of agency.

Front 21

Parker v. Domino’s Pizza, 629 So. 2d 1026 (Fla. Dist. Ct. of App. 4th Dist. 1993)

Back 21

A franchise agreement can contain terms and guidance so specific that an agency relationship arises

Front 22

Billops v. Magness Construction Co., 391 A.2d 196 (Del. Sup. 1978)

Back 22

A franchise agreement that goes beyond the stage of setting standards, and allocates to the franchisor the right to exercise control over the daily operations of the franchise, establishes an agency relationship.

Front 23

Brill v. Davajon, 201 N.E.2d 253 (Ill. App. 1964)

Back 23

Respondeat superior under a theory of agency does not apply if the purported agent is on a frolic.

Front 24

Ira S. Bushey & Sons, Inc. v. United States, 398 F.2d 167 (2nd Cir 1968)

Back 24

For certain risks that are known or should be known, a principal can be held liable under respondeat superior simply because he is an employer.

Front 25

Manning v. Grimsley, 643 F.2d 20 (1st Cir. 1981)

Back 25

Where a plaintiff seeks to recover damages from an employer for injuries resulting from an employee's assault ... [W]hat must be shown is that the employee's assault was in response to the plaintiff's conduct which was presently interfering with the employee's ability to perform his duties successfully.

Front 26

Lamkin v. Brooks, 498 So.2d 1068 (La. 1986)

Back 26

Vicarious liability under respondeat superior may be imposed when an agent is working within the course and scope of his employment.

Front 27

Arguello v. Conoco, Inc., 207 F.3d 803 (5th Cir. 2000)

Back 27

In a public accommodation case under § 1981, where liability may be predicated on an agency relationship, evidence proving an employee’s acts may be within the scope of employment, especially the extent of departure from normal behavior and foreseeability of the conduct, precludes summary judgment.

Front 28

Majestic Realty Associates, Inc. v. Toti Contracting Co., 153 A.2d 321 (N.J. 1959)

Back 28

While ultrahazardous activity operates under strict liability, “inherently dangerous” activity results in vicarious liability for the principal only upon a finding of the agent’s negligence.

Front 29

Anderson v. Marathon Petroleum Co., 801 F.2d 936 (7th Cir. 1986)

Back 29

Since the principal is the indirect employer of its contractor's employees, to make the principal liable in common law tort for the accidents befalling its contractor’s employees would be inconsistent with the bedrock principle that workers' compensation rights are exclusive of common law tort rights.

Front 30

Kleeman v. Rheingold, 614 N.E.2d 712 (N.Y. 1993)

Back 30

Service of process is a non-delegable duty for which an attorney may be held vicariously liable.

Front 31

Reading v. Regem, [1948] 2 KB 268, [1948] 2 All ER 27, [1948] WN 205 (1948)

Back 31

An agent has a duty not to acquire a material benefit from a third party through the agent’s use of the agent’s position.

Front 32

General Automotive Manufacturing Co. v. Singer, 120 N.W.2d 659 (Wis. 1963)

Back 32

An agent with a potential conflict of interest with his principal has a duty of disclosure; resolution of the conflict is at the principal’s discretion.

Front 33

Bancroft-Whitney Company v. Glen, 411 P.2d 921 (Cal. 1966)

Back 33

Corporate officers and directors are not permitted to use their position of trust and confidence to further their private interests. While technically not trustees, they stand in a fiduciary relation to the corporation and its stockholders.

Front 34

Town & Country House & Home Service, Inc. v. Newbery, 147 N.E. 2d 724 (N.Y. 1958)

Back 34

Even where a solicitor of business does not operate fraudulently under the banner of his former employer, he still may not solicit the latter's customers who are not openly engaged in business in advertised locations or whose availability as patrons cannot readily be ascertained but ‘whose trade and patronage have been secured by years of business effort and advertising, and the expenditure of time and money, constituting a part of the good will of a business which enterprise and foresight have built up’

Front 35

Corroon & Black-Rutters & Roberts, Inc. v. Hosch, 325 N.W. 2d 883 (Wis. 1982)

Back 35

Because trade secrets restrain trade, affording protection should be an exception to the general rule, dictated by public policy to not grant protection, therefore, all six prongs of the REST TORTS 757 must pass for trade secret protection to apply. An insurance company’s customer lists are not trade secrets under this test.

Front 36

Agency

Back 36

The fiduciary relationship that results from the mutual manifestation of consent that one person (the agent) shall act on behalf of and subject to the control of another person (the principal). REST 3d AGENCY 1.01.

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Disclosed principal

Back 37

A principal is disclosed if the third party with whom the agent is trnsacting business knows that the agent is acting for a principal and knows the principal's identity. REST 3d AGENCY 1.04(2)(a)

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Unidentified principal

Back 38

A principal is unidentified if the third party with whom the agent is transacting business knows that the agent is acting for a principal but does not know the principal's identify. REST 3d AGENCY 1.04(2)(c)

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Undisclosed principal

Back 39

A principal is undisclosed if the third party with whom the agent is transacting business does not know that the agent is acting for the principal. REST 3d AGENCY 1.04(2)(b)

Front 40

General agent

Back 40

A general agent is an agent authorized to conduct a series of transactions involving a continuity of service. REST 2d AGENCY 3(1)

Front 41

Factor

Back 41

A factor is a commercial agent employed by a principal to sell consigned merchandise in the agent's own name on behalf of the principal.

Front 42

Subagent

Back 42

If one agent apponts another to perform functions undertaken by the agent for the principal, and the agent acted with the authority of the principal in making the appointment, then the appointee is a subagent.

Front 43

Why a subagent has two principals

Back 43

The subagent has two principals - the appointing agent and the principal. The subagent and the appointing agent are agents of each other, as well as agents of the principal. The appointing agent is primarily liable for the acts of the subagent, and the principal is secondarily liable. REST 3d AGENCY 1.04(8)

Front 44

Agent of an agent

Back 44

If an agent appoints another agent, but was not authorized to appoint a subagent, then the appointee is not a subagent, but rather the agent's agent, and the principal is not liable for the acts of the appointee.

Front 45

Coagent

Back 45

Coagents are two or more agents who owe duties to a commpon principal but not to each other (distinguish this from the subagent, who owes duties to both the principal and the appointing agent).

Front 46

Superior and subordinate coagents

Back 46

If the coagent is directed by another agent, then the directing agent is the superior coagent and the other agent is the subordinate coagent. REST 3d AGENCY 1.04(9).

Front 47

Coagents' vicarious liability to one another

Back 47

Becaue coagents are not agents of each other, they are not vicariously liable for wrongs committed by the other. REST 3d AGENCY 1.04, comment a.

Front 48

Gratuitous agent

Back 48

A gratuitous agent is one who acts without compensation. REST 3d AGENCY.

Front 49

Employer-employee relationship

Back 49

The employer-employee relationship (traditionally called a "master-servant" relationship) is a special type of agency relationship in which the principal ("employer" or "master") employs the agent ("employee" or "servant") to perform services and retains control over the manner in which the employee performs the services. An employee is distinguished from an independent contractor, over whom the principal retains no right of control.

Front 50

Actual Authority

Back 50

An agent acts with actual authority when, at the time of taking action that has legal consequences for the principal, the agent reasonably believes, in accordance with the principal’s manifestations to the agent, that the principal wishes the agent so to act

Front 51

Express Actual Authority

Back 51

Express actual authority means an agent has been expressly told she may act on behalf of a principal.

Front 52

Implied Actual Authority

Back 52

Implied actual authority, also called "usual authority", is authority an agent has by virtue of being reasonably necessary to carry out his express authority. As such, it can be inferred by virtue of a position held by an agent. For example, partners have authority to bind the other partners in the firm, their liability being joint and several, and in a corporation, all executives and senior employees with decision-making authority by virtue of their position have authority to bind the corporation.

Front 53

Apparent Authority

Back 53

the power held by an agent or other actor to affect a principal’s legal relations with third parties when a third party reasonably believed the actor has authority to act on behalf of the principal and that belief is traceable to the principal’s manifestations.

Front 54

Ratification

Back 54

Occurs when one without authority purportedly acts on behalf of another, who later treats the act as if it were authorized.

Front 55

Estoppel

Back 55

A principal is estopped from disclaiming agency when people change their position under a belief of agency intentionally or carelessly caused or not corrected by the principal.

Front 56

Inherent Agency Power

Back 56

"Inherent agency power is a term used in the restatement of this subject to indicate the power of an agent which is derived not from authority, apparent authority or estoppel, but solely from the agency relation and exists for the protection of persons harmed by or dealing with a servant or other agent." Restatement of Agency (Second) § 8A. Inherent Agency Power.

Front 57

Requirements for an Agency Relationship

Back 57

Consent, capacity, proper purpose; (and a writing if statutes of frauds or equal dignities are involved)

Front 58

Consent

Back 58

Agency relationships ordinarily arise from prior consent between the principal and agent; however ratification after the fact is consent, and estoppel can serve as a substitute for consent.

Front 59

Agency by Agreement

Back 59

Must be based on some indication by the principal to the agent that the principal consents to have the agent act on his behalf. A similar manifestation of consent by the agent to act for the principal must be indicated as well. Eitel v. Schmidlapp, 459 F.2d 609 (4th Cir. 1972)

Front 60

Express vs. Implied Consent

Back 60

The agency agreement may be implied from the conduct of the parties

Front 61

Agency by Ratification

Back 61

An agency by ratification arises if the principal accepts the benefits or otherwise affirms the conduct of someone purporting to act on the principal's behalf, even though there was no agreement, and no authority was given for the act. Ratification retroactively creates the effects of actual authority. REST 3d AGENCY 4.01, 4.02.

Front 62

Three points on Agency by Ratification

Back 62

1. It is an Objective Determination (some evidence the principal knew); 2. No Partial Ratification (an all or nothing proposition); 3. Ratification may expose the principal to tort liability (through respondeat superior)

Front 63

Apparent Agency

Back 63

If the principal causes a third person to believe another to be the principal's agent, and the third person so relies in dealing with the purported agent, there is an "apparent agency." REST 3d AGENCY 3.03. The acts causing belief must be the principal's, and the reliance must be reasonable. Adamski v. Tacoma General Hospital, 579 P.2d 970 (Wash. 1978)

Front 64

Ostensible Agency

Back 64

Also called "agency by estoppel," arises if the principal intentionally or recklessly causes a third person to believe the agent has authority or upon notice fails to take reasonable steps to notify the third person that the agent has no authority AND the third person makes a detrimental change in position based on reliance on the belief. REST 3d AGENCY 2.05.

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trade secret

Back 65

A formula, process, device, or other business information that is kept confidential to maintain an advantage over competitors; information -- including a pattern, compilation, program, device, method, technique, or process -- that (1) derives independent economic value, actual or potential, from not being generally known or readily ascertainable by others who can obtain economic value from its disclosure or use, and (2) is the subject of reasonable efforts, under the circumstances, to maintain its secrecy.

Front 66

REST 2d AGENCY 1. Agency; Principal; Agent

Back 66

(1) Agency is the fiduciary relation 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 so to act. (2) The one for whom action is to be taken is the principal. (3) The one who is to act is the agent.

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REST 2d AGENCY 2(1). Master;

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(1) A master is a principal who employs an agent to perform service in his affairs and who controls or has the right to control the physical conduct of the other in the performance of the service.

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REST 2d AGENCY 2(2). Servant;

Back 68

(2) A servant is an agent employed by a master to perform service in his affairs whose physical conduct in the performance of the service is controlled or is subject to the right to control by the master.

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REST 2d AGENCY 2(3). Independent Contractor

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(3) An independent contractor is a person who contracts with another to do something for him but who is not controlled by the other nor subject to the other's right to control with respect to his physical conduct in the performance of the undertaking. He may or may not be an agent.

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REST 2d AGENCY 3(1). General Agent

Back 70

(1) A general agent is an agent authorized to conduct a series of transactions involving a continuity of service.

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REST 2d AGENCY 3(2). Special Agent

Back 71

(2) A special agent is an agent authorized to conduct a single transaction or a series of transactions not involving continuity of service.

Front 72

REST 2d AGENCY 4(1). Disclosed Principal;

Back 72

(1) If, at the time of a transaction conducted by an agent, the other party thereto has notice that the agent is acting for a principal and of the principal's identity, the principal is a disclosed principal.

Front 73

REST 2d AGENCY 4(2). Partially Disclosed Principal;

Back 73

(2) If the other party has notice that the agent is or may be acting for a principal but has no notice of the principal's identity, the principal for whom the agent is acting is a partially disclosed principal.

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REST 2d AGENCY 4(3). Undisclosed Principal

Back 74

(3) If the other party has no notice that the agent is acting for a principal, the one for whom he acts is an undisclosed principal.

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REST 2d AGENCY 5(1). Subagents

Back 75

(1) A subagent is a person appointed by an agent empowered to do so, to perform functions undertaken by the agent for the principal, but for whose conduct the agent agrees with the principal to be primarily responsible.

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REST 2d AGENCY 5(2). Subservants

Back 76

(2) A subservant is a person appointed by a servant empowered to do so, to perform functions undertaken by the servant for the master and subject to the control as to his physical conduct both by the master and by the servant, but for whose conduct the servant agrees with the principal to be primarily responsible.

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REST 2d AGENCY 6. Power

Back 77

A power is an ability on the part of a person to produce a change in a given legal relation by doing or not doing a given act.

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REST 2d AGENCY 7. Authority

Back 78

Authority is the power of the agent to affect the legal relations of the principal by acts done in accordance with the principal's manifestations of consent to him.

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REST 2d AGENCY 8. Apparent Authority

Back 79

Apparent authority is the power to affect the legal relations of another person by transactions with third persons, professedly as agent for the other, arising from and in accordance with the other's manifestations to such third persons.

Front 80

REST 2d AGENCY 8A. Inherent Agency Power

Back 80

Inherent agency power is a term used in the restatement of this subject to indicate the power of an agent which is derived not from authority, apparent authority or estoppel, but solely from the agency relation and exists for the protection of persons harmed by or dealing with a servant or other agent.

Front 81

REST 2d AGENCY 8B(1). Estoppel—Change Of Position (transaction purported to be done on principal’s account)

Back 81

(1) A person who is not otherwise liable as a party to a transaction purported to be done on his account, is nevertheless subject to liability to persons who have changed their positions because of their belief that the transaction was entered into by or for him, if(a) he intentionally or carelessly caused such belief, or(b) knowing of such belief and that others might change their positions because of it, he did not take reasonable steps to notify them of the facts.

Front 82

REST 2d AGENCY 8B(2). Estoppel—Change Of Position (in the case of a property owner)

Back 82

(2) An owner of property who represents to third persons that another is the owner of the property or who permits the other so to represent, or who realizes that third persons believe that another is the owner of the property, and that he could easily inform the third persons of the facts, is subject to the loss of the property if the other disposes of it to third persons who, in ignorance of the facts, purchase the property or otherwise change their position with reference to it.

Front 83

REST 2d AGENCY 8B. Estoppel—Change Of Position (meaning of change of position)

Back 83

(3) Change of position, as the phrase is used in the restatement of this subject, indicates payment of money, expenditure of labor, suffering a loss or subjection to legal liability.

Front 84

REST 2d AGENCY 13. Agent As A Fiduciary

Back 84

An agent is a fiduciary with respect to matters within the scope of his agency.

Front 85

REST 2d AGENCY 26. Creation Of Authority; General Rule

Back 85

Except for the execution of instruments under seal or for the performance of transactions required by statute to be authorized in a particular way, authority to do an act can be created by written or spoken words or other conduct of the principal which, reasonably interpreted, causes the agent to believe that the principal desires him so to act on the principal's account.

Front 86

REST 2d AGENCY 27. Creation Of Apparent Authority: General Rule

Back 86

Except for the execution of instruments under seal or for the conduct of transactions required by statute to be authorized in a particular way, apparent authority to do an act is created as to a third person by written or spoken words or any other conduct of the principal which, reasonably interpreted, causes the third person to believe that the principal consents to have the act done on his behalf by the person purporting to act for him.

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REST 2d AGENCY 33. General Principle Of Interpretation (of authority and apparent authority)

Back 87

An agent is authorized to do, and to do only, what it is reasonable for him to infer that the principal desires him to do in the light of the principal's manifestations and the facts as he knows or should know them at the time he acts.

Front 88

REST 2d AGENCY 34. Circumstances Considered In Interpreting Authority (whether actual or apparent)

Back 88

An authorization is interpreted in light of all accompanying circumstances, including among other matters: (a) the situation of the parties, their relations to one another, and the business in which they are engaged; (b) the general usages of business, the usages of trades or employments of the kind to which the authorization relates, and the business methods of the principal; (c) facts of which the agent has notice respecting the objects which the principal desires to accomplish; (d) the nature of the subject matter, the circumstances under which the act is to be performed and the legality or illegality of the act; and (e) the formality or informality, and the care, or lack of it, with which an instrument evidencing the authority is drawn.

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REST 2d AGENCY 35. When Incidental Authority Is Inferred

Back 89

Unless otherwise agreed, authority to conduct a transaction includes authority to do acts which are incidental to it, usually accompany it, or are reasonably necessary to accomplish it.

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REST 2d AGENCY 82. Ratification

Back 90

Ratification is the affirmance by a person of a prior act which did not bind him but which was done or professedly done on his account, whereby the act, as to some or all persons, is given effect as if originally authorized by him.

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REST 2d AGENCY 83. Affirmance

Back 91

Affirmance is either (a) a manifestation of an election by one on whose account an unauthorized act has been done to treat the act as authorized, or (b) conduct by him justifiable only if there were such an election.

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REST 2d AGENCY 144. General Rule (of liability created by authorized acts for a disclosed or partially disclosed principal)

Back 92

A disclosed or partially disclosed principal is subject to liability upon contracts made by an agent acting within his authority if made in proper form and with the understanding that the principal is a party.

Front 93

REST 2d AGENCY 145. Authorized Representations (on behalf of a disclosed or partially disclosed principal)

Back 93

In actions brought upon a contract or to rescind a contract or conveyance to which he is a party, a disclosed or partially disclosed principal is responsible for authorized representations of an agent made in connection with it as if made by himself, subject to the rules as to the effect of knowledge of, and notifications given to, the agent.

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REST 2d AGENCY 159. Apparent Authority (of an agent of a disclosed or partially disclosed principal)

Back 94

A disclosed or partially disclosed principal is subject to liability upon contracts made by an agent acting within his apparent authority if made in proper form and with the understanding that the apparent principal is a party. The rules as to the liability of a principal for authorized acts, are applicable to unauthorized acts which are apparently authorized.

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REST 2d AGENCY 160. Violation Of Secret Instructions (of a disclosed or partially disclosed agent)

Back 95

A disclosed or partially disclosed principal authorizing an agent to make a contract, but imposing upon him limitations as to incidental terms intended not to be revealed, is subject to liability upon a contract made in violation of such limitations with a third person who has no notice of them.

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REST 2d AGENCY 161. Unauthorized Acts Of General Agent (of a disclosed or partially disclosed agent)

Back 96

A general agent for a disclosed or partially disclosed principal subjects his principal to liability for acts done on his account which usually accompany or are incidental to transactions which the agent is authorized to conduct if, although they are forbidden by the principal, the other party reasonably believes that the agent is authorized to do them and has no notice that he is not so authorized.

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REST 2d AGENCY 186. General Rule (of liability created by authorized acts for an undisclosed principal)

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An undisclosed principal is bound by contracts and conveyances made on his account by an agent acting within his authority, except that the principal is not bound by a contract which is under seal or which is negotiable, or upon a contract which excludes him.

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REST 2d AGENCY 194. Acts Of General Agents (of an unauthorized principal)

Back 98

A general agent for an undisclosed principal authorized to conduct transactions subjects his principal to liability for acts done on his account, if usual or necessary in such transactions, although forbidden by the principal to do them.

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REST 2d AGENCY 195. Acts Of Manager Appearing To Be Owner

Back 99

An undisclosed principal who entrusts an agent with the management of his business is subject to liability to third persons with whom the agent enters into transactions usual in such businesses and on the principal's account, although contrary to the directions of the principal.

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REST 2d AGENCY 195A. Unauthorized Acts Of Special Agents

Back 100

A special agent for an undisclosed principal has no power to bind his principal by contracts or conveyances which he is not authorized to make unless: (a) the agent's only departure from his authority is (i) in not disclosing his principal, or (ii) in having an improper motive, or (iii) in being negligent in determining the facts upon which his authority is based, or (iv) in making misrepresentations; or (b) the agent is given possession of goods or commercial documents with authority to deal with them.

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REST 2d AGENCY 219(1). When Master Is Liable For Torts Of His Servants (within the scope of their employment)

Back 101

(1) A master is subject to liability for the torts of his servants committed while acting in the scope of their employment.

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REST 2d AGENCY 219(2). When Master Is Liable For Torts Of His Servants (acting outside the scope of their employment)

Back 102

(2) A master is not subject to liability for the torts of his servants acting outside the scope of their employment, unless: (a) the master intended the conduct or the consequences, or (b) the master was negligent or reckless, or (c) the conduct violated a non-delegable duty of the master, or (d) the servant purported to act or to speak on behalf of the principal and there was reliance upon apparent authority, or he was aided in accomplishing the tort by the existence of the agency relation.

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REST 2d AGENCY 220(1). Definition Of Servant

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(1) A servant is a person employed to perform services in the affairs of another and who with respect to the physical conduct in the performance of the services is subject to the other's control or right to control.

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REST 2d AGENCY 220. Definition Of Servant (10 factors to distinguish a servant from an independent contractor)

Back 104

(2) In determining whether one acting for another is a servant or an independent contractor, the following matters of fact, among others, are considered: (a) the extent of control which, by the agreement, the master may exercise over the details of the work; (b) whether or not the one employed is engaged in a distinct occupation or business; (c) the kind of occupation, with reference to whether, in the locality, the work is usually done under the direction of the employer or by a specialist without supervision; (d) the skill required in the particular occupation; (e) whether the employer or the workman supplies the instrumentalities, tools, and the place of work for the person doing the work; (f) the length of time for which the person is employed; (g) the method of payment, whether by the time or by the job; (h) whether or not the work is a part of the regular business of the employer; (i) whether or not the parties believe they are creating the relation of master and servant; and (j) whether the principal is or is not in business.

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REST 2d AGENCY 228(1). General Statement (on whether Torts of Servants are within the Scope of their Employment)

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(1) Conduct of a servant is within the scope of employment if, but only if: (a) it is of the kind he is employed to perform; (b) it occurs substantially within the authorized time and space limits; (c) it is actuated, at least in part, by a purpose to serve the master, and (d) if force is intentionally used by the servant against another, the use of force is not unexpectable by the master.

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REST 2d AGENCY 228(2). General Statement (on whether Torts of Servants are outside the Scope of their Employment)

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(2) Conduct of a servant is not within the scope of employment if it is different in kind from that authorized, far beyond the authorized time or space limits, or too little actuated by a purpose to serve the master.

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REST 2d AGENCY 229. Kind Of Conduct Within Scope Of Employment (generally)

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(1) To be within the scope of the employment, conduct must be of the same general nature as that authorized, or incidental to the conduct authorized.

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REST 2d AGENCY 229. Kind Of Conduct Within Scope Of Employment (10 factors to consider)

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(2) In determining whether or not the conduct, although not authorized, is nevertheless so similar to or incidental to the conduct authorized as to be within the scope of employment, the following matters of fact are to be considered: (a) whether or not the act is one commonly done by such servants; (b) the time, place and purpose of the act; (c) the previous relations between the master and the servant; (d) the extent to which the business of the master is apportioned between different servants; (e) whether or not the act is outside the enterprise of the master or, if within the enterprise, has not been entrusted to any servant; (f) whether or not the master has reason to expect that such an act will be done; (g) the similarity in quality of the act done to the act authorized; (h) whether or not the instrumentality by which the harm is done has been furnished by the master to the servant; (i) the extent of departure from the normal method of accomplishing an authorized result; and (j) whether or not the act is seriously criminal.

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REST 2d AGENCY 230. Forbidden Acts (and scope of employment)

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An act, although forbidden, or done in a forbidden manner, may be within the scope of employment.

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REST 2d AGENCY 231. Criminal Or Tortious Acts (and scope of employment)

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An act may be within the scope of employment although consciously criminal or tortious.

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REST 2d AGENCY 376. General Rule (on duties of the agent to the principal when consent between principal and agent is manifest)

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The existence and extent of the duties of the agent to the principal are determined by the terms of the agreement between the parties, interpreted in light of the circumstances under which it is made, except to the extent that fraud, duress, illegality, or the incapacity of one or both of the parties to the agreement modifies it or deprives it of legal effect.

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REST 2d AGENCY 377. Contractual Duties (of the agent to the principal)

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A person who makes a contract with another to perform services as an agent for him is subject to a duty to act in accordance with his promise.

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REST 2d AGENCY 378. Gratuitous Undertakings (duties of a gratuitous agent to the principal)

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One who, by a gratuitous promise or other conduct which he should realize will cause another reasonably to rely upon the performance of definite acts of service by him as the other's agent, causes the other to refrain from having such acts done by other available means is subject to a duty to use care to perform such service or, while other means are available, to give notice that he will not perform.

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REST 2d AGENCY 379(1). Duty Of Care And Skill (for a paid agent)

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(1) Unless otherwise agreed, a paid agent is subject to a duty to the principal to act with standard care and with the skill which is standard in the locality for the kind of work which he is employed to perform and, in addition, to exercise any special skill that he has.

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REST 2d AGENCY 379(2). Duty Of Care And Skill (for a gratuitous agent)

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(2) Unless otherwise agreed, a gratuitous agent is under a duty to the principal to act with the care and skill which is required of persons not agents performing similar gratuitous undertakings for others.

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REST 2d AGENCY 380. Duty Of Good Conduct

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Unless otherwise agreed, an agent is subject to a duty not to conduct himself with such impropriety that he brings disrepute upon the principal or upon the business in which he is engaged. If the service involves personal relations, he has a duty not to act in such a way as to make continued friendly relations with the principal impossible.

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REST 2d AGENCY 381. Duty To Give Information

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Unless otherwise agreed, an agent is subject to a duty to use reasonable efforts to give his principal information which is relevant to affairs entrusted to him and which, as the agent has notice, the principal would desire to have and which can be communicated without violating a superior duty to a third person.

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REST 2d AGENCY 382. Duty To Keep And Render Accounts

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Unless otherwise agreed, an agent is subject to a duty to keep, and render to his principal, an account of money or other things, which he has received or paid out on behalf of the principal.

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REST 2d AGENCY 383. Duty To Act Only As Authorized

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Except when he is privileged to protect his own or another's interests, an agent is subject to a duty to the principal not to act in the principal's affairs except in accordance with the principal's manifestation of consent.

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REST 2d AGENCY 384. Duty Not To Attempt The Impossible Or Impracticable

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Unless otherwise agreed, an agent is subject to a duty to the principal not to continue to render service which subjects the principal to risk of expense if it reasonably appears to him to be impossible or impracticable for him to accomplish the objects of the principal and if he cannot communicate with the principal.

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REST 2d AGENCY 385. Duty To Obey (duty to act according to direction)

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(1) Unless otherwise agreed, an agent is subject to a duty to obey all reasonable directions in regard to the manner of performing a service that he has contracted to perform.

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REST 2d AGENCY 385. Duty To Obey (duty to not act contrary to direction)

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(2) Unless he is privileged to protect his own or another's interests, an agent is subject to a duty not to act in matters entrusted to him on account of the principal contrary to the directions of the principal, even though the terms of the employment prescribe that such directions shall not be given.

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REST 2d AGENCY 386. Duties After Termination Of Authority

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Unless otherwise agreed, an agent is subject to a duty not to act as such after the termination of his authority.

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REST 2d AGENCY 387. General Principle (for the duty of loyalty)

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Unless otherwise agreed, an agent is subject to a duty to his principal to act solely for the benefit of the principal in all matters connected with his agency.

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REST 2d AGENCY 388. Duty To Account For Profits Arising Out Of Employment

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Unless otherwise agreed, an agent who makes a profit in connection with transactions conducted by him on behalf of the principal is under a duty to give such profit to the principal.

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REST 2d AGENCY 389. Acting As Adverse Party Without Principal's Consent

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Unless otherwise agreed, an agent is subject to a duty not to deal with his principal as an adverse party in a transaction connected with his agency without the principal's knowledge.

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REST 2d AGENCY 390. Acting As Adverse Party With Principal's Consent

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An agent who, to the knowledge of the principal, acts on his own account in a transaction in which he is employed has a duty to deal fairly with the principal and to disclose to him all facts which the agent knows or should know would reasonably affect the principal's judgment, unless the principal has manifested that he knows such facts or that he does not care to know them.

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REST 2d AGENCY 391. Acting For Adverse Party Without Principal's Consent

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Unless otherwise agreed, an agent is subject to a duty to his principal not to act on behalf of an adverse party in a transaction connected with his agency without the principal's knowledge.

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REST 2d AGENCY 392. Acting For Adverse Party With Principal's Consent

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An agent who, to the knowledge of two principals, acts for both of them in a transaction between them, has a duty to act with fairness to each and to disclose to each all facts which he knows or should know would reasonably affect the judgment of each in permitting such dual agency, except as to a principal who has manifested that he knows such facts or does not care to know them.

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REST 2d AGENCY 393. Competition As To Subject Matter Of Agency

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Unless otherwise agreed, an agent is subject to a duty not to compete with the principal concerning the subject matter of his agency.

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REST 2d AGENCY 394. Acting For One With Conflicting Interests

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Unless otherwise agreed, an agent is subject to a duty not to act or to agree to act during the period of his agency for persons whose interests conflict with those of the principal in matters in which the agent is employed.

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REST 2d AGENCY 395. Using Or Disclosing Confidential Information

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Unless otherwise agreed, an agent is subject to a duty to the principal not to use or to communicate information confidentially given him by the principal or acquired by him during the course of or on account of his agency or in violation of his duties as agent, in competition with or to the injury of the principal, on his own account or on behalf of another, although such information does not relate to the transaction in which he is then employed, unless the information is a matter of general knowledge.

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REST 2d AGENCY 396. Using Confidential Information After Termination Of Agency

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Unless otherwise agreed, after the termination of the agency, the agent: (a) has no duty not to compete with the principal; (b) has a duty to the principal not to use or to disclose to third persons, on his own account or on account of others, in competition with the principal or to his injury, trade secrets, written lists of names, or other similar confidential matters given to him only for the principal's use or acquired by the agent in violation of duty. The agent is entitled to use general information concerning the method of business of the principal and the names of the customers retained in his memory, if not acquired in violation of his duty as agent; (c) has a duty to account for profits made by the sale or use of trade secrets and other confidential information, whether or not in competition with the principal; (d) has a duty to the principal not to take advantage of a still subsisting confidential relation created during the prior agency relation.

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REST 2d AGENCY 397. When Agent Has Right To Patents

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Unless otherwise agreed, a person employed by another to do noninventive work is entitled to patents which are the result of his invention although the invention is due to the work for which he is employed.

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REST 2d AGENCY 398. Confusing Or Appearing To Own Principal's Things

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Unless otherwise agreed, an agent receiving or holding things on behalf of the principal is subject to a duty to the principal not to receive or deal with them so that they will appear to be his own, and not so to mingle them with his own things as to destroy their identity.

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REST 2d AGENCY 399. Remedies Of Principal

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A principal whose agent has violated or threatens to violate his duties has an appropriate remedy for such violation. Such remedy may be: (a) an action on the contract of service; (b) an action for losses and for the misuse of property; (c) an action in equity to enforce the provisions of an express trust undertaken by the agent; (d) an action for restitution, either at law or in equity; (e) an action for an accounting; (f) an action for an injunction; (g) set-off or counterclaim; (h) causing the agent to be made party to an action brought by a third person against the principal; (i) self-help; (j) discharge; or (k) refusal to pay compensation or rescission of the contract of employment.

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REST 2d AGENCY 400. Liability For Breach Of Contract

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An agent who commits a breach of his contract with his principal is subject to liability to the principal in accordance with the principles stated in the Restatement of Contracts.

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REST 2d AGENCY 401. Liability For Loss Caused

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An agent is subject to liability for loss caused to the principal by any breach of duty.

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REST 2d AGENCY 402. Liability For Misuse Of Principal's Property (chattel, chose in action or money; 8 acts and 1 injury)

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(1) An agent is subject to liability to the principal for the value of a chattel, a chose in action, or money which he holds for the principal and to the immediate possession of which the principal is entitled, together with interest thereon if the amount is liquidated, or damages, if the agent: (a) intentionally or negligently destroys it or causes its loss; (b) uses it for his own purposes under an adverse claim; (c) unreasonably refuses to surrender it on demand; (d) manifests that he will not surrender it except on conditions which he is not privileged to exact; (e) makes delivery of it to a person to whom he is not authorized to deliver it; (f) improperly causes the title or indicia of title to be placed in his own name, if either this is done in bad faith or the thing substantially depreciates in value while the title is so held because of his wrongful conduct; (g) deviates substantially from his authority in its transfer to a third person in a sale or purchase; or (h) intentionally and substantially deviates from his authority in dealing with the possession of the thing, and the chattel suffers substantial harm during the course of such wrongful dealing or because of it.

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REST 2d AGENCY 402. Liability For Misuse Of Principal's Property (real property)

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(2) An agent who deviates substantially from his authority in the transfer of land belonging to the principal or who, in bad faith, causes the title of such land to be placed in his own name, is subject to liability to the principal for the value of the land.

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REST 2d AGENCY 403. Liability For Things Received In Violation Of Duty Of Loyalty

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If an agent receives anything as a result of his violation of a duty of loyalty to the principal, he is subject to a liability to deliver it, its value, or its proceeds, to the principal.

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REST 2d AGENCY 404. Liability For Use Of Principal's Assets

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An agent who, in violation of duty to his principal, uses for his own purposes or those of a third person assets of the principal's business is subject to liability to the principal for the value of the use. If the use predominates in producing a profit he is subject to liability, at the principal's election, for such profit; he is not, however, liable for profits made by him merely by the use of time which he has contracted to devote to the principal unless he violates his duty not to act adversely or in competition with the principal.