The Agency Relationship Flashcards
Who are the two parties to an agency relationship?
- Principal
- Agent
What is the general role of an agent?
To do things on behalf of the principal
What is the general role of a principal?
To direct the agent’s acts
What are some reasons for creating an agency relationship?
- To extend the principal’s economic reach
- To acquire the agent’s expertise
- To make money
What are the three components of an agency relationship?
- Assent: both parties manifest assent to work with one another
- Benefit: the agent agrees to work for the principal’s benefit
- Control: the agent agrees to work subject to the principal’s control
Mnemonic: ABC
Is consideration required to create an agency relationship?
No
When one or more parties disclaim the creation of an agency relationship, what do courts look to?
Manifestations of assent (e.g. letters, spoken words, actions)
Who can be a principal?
Almost any person or entity that has legal capacity
Who cannot be a principal?
- Minors
- Anyone incapacitated by illness
- Anyone incapacitated by intoxication
- Unincorporated associations
What do employers do in exerting a significant amount of control over employees?
- Giving employees tools to work
- Paying employees on a structured pay period
- Directing the ways in which employees should perform their tasks
Who can be an agent?
Any person or entity who has minimal capacity
What is required for an agent to have minimal capacity?
An agent must be able to:
- Assent to the agency relationship;
- Perform the tasks on behalf of the principal; and
- Be subject to the principal’s control
Is writing necessary to form an agency relationship?
No
Does an employer have the right to control an employee agent’s physical conduct of work?
Yes
Does an employer have the right to control an independent contractor agent’s physical conduct of work?
No
