INTRODUCTION TO THE LAW OF AGENCY

AGENCY; A STUDY GUIDE #3
1. By The Angry Jeweler; The Hennalady; Lisa Stinocher O'Hanlon http://angryjeweler.wix.com/write
  1. This study guide is for the following documents:
    1. Black's Law Dictionary (8th ed. 2004)
    2. legal-dictionary.thefreedictionary.com/Administrative+Agency
    3. INTRODUCTION TO THE LAW OF AGENCY http://www.scribd.com/doc/52197323/Agency-Defined
WHO IS AGENT?
1. WHO IS PRINCIPAL?
  1. WHAT IS CONTRACT?
A. NATURE OF AGENCY
1. agency. 1. A fiduciary relationship created by express or implied contract or by law, in which one party (the agent) may act on behalf of another party (the principal) and bind that other party by words or actions. See AUTHORITY (1). [Cases: Principal and Agent 1. C.J.S. Agency §§ 2, 4–6, 23, 25–27, 33, 38–40, 58.] “The basic theory of the agency device is to enable a person, through the services of another, to broaden the scope of his activities and receive the product of another's efforts, paying such other for what he does but retaining for himself any net benefit resulting from the work performed.” Harold Gill Reuschlein & William A. Gregory, The Law of Agency and Partnership§ 1, at 3 (2d ed. 1990). Black's Law Dictionary (8th ed. 2004) , Page 191
  1. general agency.A principal's delegation to an agent, without restriction, to take any action connected with a particular trade, business, or employment. — Also termed universal agency. [Cases: Principal and Agent 93. C.J.S. Agency § 172.]
    1. implied agency.An actual agency arising from the conduct by the principal that implies an intention to create an agency relationship. Cf. express agency. [Cases: Principal and Agent 99. C.J.S. Agency §§ 153–164.]
      1. special agency.An agency in which the agent is authorized only to conduct a single transaction or a series of transactions not involving continuous service. [Cases: Principal and Agent 94. C.J.S. Agency § 172.]
2. AGENCY IS A FIDUCIARY LEGAL RELATIONSHIP WHERE ONE PERSON REPRESENTS ANOTHER IN DEALING WITH THIRD PERSONS
  1. 1.
    1. PARTIES TO AN AGENCY; §1328
      1. EXPRESS
      2. IMPLIED
  2. 2.
    1. OTHER USES OF THE TERM "AGENCY" §1329
      1. RIGHT OF AGENCY
      2. AGENCY MAY BE DEFINED DIFFERENTLY UNDER DIFFERENT QUESTIONS OF LAW
      3. TAX LIABILITY TO THE ENTERPRISE
      4. CONTRACT LAW
      5. TORT LAW
  3. 3.
    1. AGENCY DISTINGUISHED FROM OTHER RELATIONSHIPS §1331
      1. EMPLOYEE
      2. IS NOT HIRED TO REPRESENT AN EMPLOYER IN DEALING WITH THIRD PERSONS
      3. INDEPENDENT CONTRACTOR AS AGENT
      4. CONTROLLED AGENT IS EMPLOYER MAKES MANAGEMENT DECISIONS OR CONTROLS OPERATIONS OF THE WORK
      5. BAILEE
      6. A BAILMENT EXISTS WHEN THE PERSONAL PROPERTY IS DELIVERED TO ANOTHER UNDER AN AGREEMENT TO RETURN THE PROPERTY OR DELIVER IT TO A THIRD PERSON THE PERSON RECEIVING THE PROPERTY (THE BAILEE) IS NOT AN AGENT; HE HAS NO AUTHORITY TO CONTRACT ON BEHALF OF THE OWNER - BAILOR.
      7. INDEPENDANT CONTRACTOR
      8. CONTRACTS TO DO SOMETHING ACCORDING TO HIS OWN METHODS NOT SUBJECT TO THE CONTROL THE THE EMPLOYER EXCEPT AS TO RESULTS
      9. REAL ESTATE BROKER
      10. MIDDLEMAN; SEEKS TO LOCATE BUYER OR SELLER NOT A TRUE AGENT; NO AUTHORITY TO MAKE A CONTRACT WITH THIRD PERSONS THAT WILL BE BINDING ON HIS CLIENT
      11. AGENCY INVOLVES THE RESPONSIBILITY OF THE PRINCIPAL FOR ACTS OF THE AGENT
      12. actual agency.An agency in which the agent is in fact employed by a principal. [Cases: Principal and Agent 96, 99. C.J.S. Agency §§ 148–149, 153–164.]
      13. agency in fact.An agency created voluntarily, as by a contract. • Agency in fact is distinguishable from an agency relationship created by law, such as agency by estoppel. [Cases: Principal and Agent 8. C.J.S. Agency §§ 36–40.]
      14. NOTICE TO AGENT IS NOTICE TO PRINCIPAL
B. CREATION OF AGENCY §1338
1. AGENCY CAN BE CREATED BY AGREEMENT, BY CONDUCT OF THE PARTIES, BY ESTOPPEL, BY RATIFICATION, OR BY OPERATION OF LAW
  1. 1.
    1. CAPACITY OF THE PARTIES
      1. a. CAPACITY OF PRINCIPAL
      2. ANYONE WITH LEGAL CAPACITY TO CONTRACT
      3. b. CAPACITY OF AGENT
      4. ANYONE WHO UNDERSTANDS LEGAL IMPORTANCE OF CONTRACTS; EVEN A MINOR
  2. 2.
    1. CREATION OF AGENCY BY AGREEMENT
      1. ORAL AUTHORIZATION
      2. EQUAL DIGNITIES
      3. CONSIDERATION
  3. 3.
    1. AGENCY CREATED BY CONDUCT OF PARTIES; IMPLIED AGENCY
      1. INFERENCES OR DEDUCTIONS MADE FROM WORDS OR CONDUCT OF PRINCIPAL & AGENT
  4. 4.
    1. CREATION OF AGENCY BY ESTOPPEL
      1. APPARENT AUTHORITY PRINCIPAL BY WORDS OR BY ACTIONS, OR BY LACK THEREOF, CAUSES A THIRD PERSON TO BELIEVE REASONABLY THAT AN AGENCY RELATIONSHIP EXISTS OR THAT AN AGENT HAS AUTHORITY TO ACT WHERE NO AGENCY RELATIONSHIP EXISTS
      2. agency by estoppel.An agency created by operation of law and established by a principal's actions that would reasonably lead a third person to conclude that an agency exists. — Also termed apparent agency; ostensible agency; agency by operation of law. [Cases: Principal and Agent 25(3), 137. C.J.S. Agency §§ 61, 157, 211.]
  5. 5.
    1. AGENCY CREATED BY RATIFICATION
      1. WHEN PRINCIPAL ACCEPTS BENEFITS FROM THE ACTS OF A PURPORTED AGENT, EVEN WHEN UNAUTHORIZED, AGENCY MAY BE CREATED BY RATIFICATION
  6. 6.
    1. AGENCY CREATED BY OPERATION OF LAW
      1. agency of necessity.An agency arising during an emergency that necessitates the agent's acting without authori-zation from the principal; the relation between a person who in exigent circumstances acts in the interest of another without being authorized to do so. • It is a quasi-contractual relation formed by the operation of legal rules and not by the agreement of the parties. — Also termed agency from necessity; agency by necessity. See NEGOTIORUM GESTIO. [Cases: Principal and Agent 14(1), 99. C.J.S. Agency §§ 20, 53, 153–164; Architects § 21.]
      2. undisclosed agency.An agency relationship in which an agent deals with a third party who has no knowledge that the agent is acting on a principal's behalf. • The fact that the agency is undisclosed does not prohibit the third party from seeking redress from the principal or the agent. [Cases: Principal and Agent 138–146. C.J.S. Agency §§ 166, 369–371, 385, 387–388, 393, 412–419, 448–451.]
C. TERMINATION OF AGENCY
1. AN AGENCY MAY BE TERMINATED BY ACTS OF THE PARTIES OR BY OPERATION OF LAW
  1. 1.
    1. TERMINATION BY ACTS OF PARTIES
      1. a. MUTUAL AGREEMENT
      2. b. EXPIRATION OF THE CONTRACT
      3. c. REVOCATION OF AUTHORITY
      4. PRINCIPAL MAY REVOKE AUTHORITY OF AGENT AT ANY TIME
      5. 2. DEFINITE CONTRACT PERIOD
      6. REVOCATION MAY RESULT IN DAMGES FOR BREACH OF CONTRACT
      7. 1. INDEFINITE TIME
      8. REVOKED AT ANY TIME BY EITHER PARTY
      9. d. REVOCATION BY AGENT
      10. e. REVOCATION BY OPTION
  2. 2.
    1. TERMINATION BY OPERATION OF LAW
      1. a. DEATH OF PRINCIPAL
      2. b. DEATH OF AGENT
      3. c. MENTAL INCOMPETANCY
      4. d. BANKRUPTCY
      5. e. IMPOSSIBILITY
      6. f. WAR
      7. g. CHANGE IN BUSINESS CONDITIONS
  3. 3.
    1. NOTICE IS REQUIRED TO TERMINATE!
D. IRREVOCABLE AGENCY
1. agency coupled with an interest.An agency in which the agent is granted not only the power to act on behalf of a principal but also a legal interest in the estate or property involved. • This type of agency is irrevocable before the interest expires, unless the parties agree otherwise when creating the interest. The agency survives even if the principal becomes insane or dies. See power coupled with an interest under POWER(3). [Cases: Principal and Agent 34, 43(2). C.J.S. Agency §§ 114–119, 136.]
  1. exclusive agency.The right to represent a principal — esp. either to sell the principal's products or to act as the seller's real-estate agent — within a particular market free from competition. • Strictly speaking, an exclusive agency merely excludes all other brokers, but not the owner, from selling the products or property. — Also termed exclusive agency to sell; exclusive franchise; sole selling agency. Cf. EXCLUSIVE RIGHT OF SALE. “Contracts involving the element of exclusive agency generally fall into three classes: (1) where the contract does not prevent the principal from making direct sales but deprives him of the right to appoint other agents; (2) where the agent is the only one with any right to sell; and (3) where the exclusive agency is accompanied with a stipulated right to commissions on all sales whether made through the agent or not.” 3 Am. Jur. 2d Agency § 268, at 768 (1986). express agency.An actual agency arising from the principal's written or oral authorization of a person to act as the principal's agent. Cf. implied agency. [Cases: Principal and Agent 96. C.J.S. Agency §§ 148–149.] Black's Law Dictionary (8th ed. 2004) , Page 192