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Lecture 13

MCS 3040 Lecture Notes - Lecture 13: Sports Agent, Fiduciary, Apparent Authority


Department
Marketing and Consumer Studies
Course Code
MCS 3040
Professor
Joseph Radocchia
Lecture
13

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The$Agency$Relationship
A$relationship$that$exists$when$one$party$represents$another$in$the$formation$of$
legal$relations$
A$person$who$is$authorized$to$act$on$behalf$of$another
Agent
A$person$who$has$permitted$another$to$act$on$her$or$his$behalf$
Principal$
What$is$"agency"$at$law?
A$sports$agent$negotiates$a$multimillion@dollar$deal$on$behalf$of$a$hockey$player
A$travel$agent$sells$tickets,$cruises,$and$vacation$packages$on$behalf$of$carriers$
and$hotels$
A$business$would$use$an$agent$to$act$on$its$behalf$if$the$principal$did$not$have$
the$expertise$ of$an$agent$
Time$constraint$on$a$principal$is$another$common$reason$for$the$use$of$an$agent$
A$booking$agent$negotiates$fees$and$dates$on$behalf$of$entertainers$
A$stockbroker$buys$and$sells$shares$on$behalf$of$individuals$and$companies$
Examples$of$agency$relationships
An$agency$relationship$created$when$the$principal$acts$such$that$third$
parties$reasonably$conclude$that$an$agency$relationship$exists$
Agency$by$estoppel$
An$agency$relationship$created$when$one$party$adopts$a$contract$entered$
into$on$his$behalf$by$another$who$at$the$time$acted$without$authority$
Agency$by$ratification$
He/she$does$so$within$a$reasonable$time
The$principal$had$the$capacity$to$create$the$contract$at$the$time$the$agent$
entered$into$it$and$at$the$time$of$ratification,$and
The$agent$identified$the$principal$at$the$time$of$entering$the$contract$
A$principal$can$only$ratify$a$contract$if
Creation$of$the$agency$relationship
The$power$of$an$agent$that$derives$from$either$express$or$implied$
agreement
Actual$authority
The$power$that$an$agent$appears$to$have$to$an$outsider$because$of$
conduct$or$statements$of$the$principal$
Apparent$authority$
Companies$can$minimize$the$risk$of$liability$ for$the$actions$of$their$
salespeople$by$being$careful$not$to$make$representations$that$result$in$
the$salespeople$acquiring$apparent$or$ostensible$authority
Make$it$clear$to$third$parties$the$limitations$on$the$agent's$authority$
Case:$Doiron$v$Devon$Capital$Corp$(2003)$
Written$or$oral$authority$granted$by$a$principal$to$an$agent
Express$authority
Agent's$authority$that$is$presented$by$implication$only$
Implied$authority$
Case:$Rockland$Industries$Inc$v$Amerada$Minerals$Corporation$of$Canada$(1980)$
Authority$of$agent
A$real$estate$agent's$authority$includes$actual$and$apparent$authority
The$actual$authority$of$a$real$estate$agent$is$both$express$and$implied$
Business$application$of$the$law:$Real$estate$agents
Must$perform$in$accordance$with$the$principal's$instructions,$or$failing$
instructions,$then$performance$must$meet$the$standards$of$the$particular$trade$
or$industry$
Duties$of$an$agent
Duty$imposed$on$a$person$who$has$a$special$relationship$of$trust$with$
another
Fiduciary$duty
Person$who$has$a$duty$of$good$faith$toward$another$due$to$a$relationship$
Fiduciary$
Agents$are$fiduciaries$
Pay$the$agent$a$specified$fee$or$percentage$for$services$rendered
Assist$the$agent$in$the$manner$described$in$the$contract
Reimburse$the$agent$for$reasonable$expenses$associated$with$carrying$out$the$
agency$duties$
Indemnify$against$losses$incurred$in$carrying$out$the$agency$business$
Duties$are$normally$set$out$in$the$contract$that$creates$the$agency$relationship$
and$aren't$as$onerous$as$an$agent's$
Duties$of$the$principal
When$an$agent$enters$into$a$contract$on$behalf$of$a$principal$with$a$third$party,$
it$is$the$principal,$not$the$agent,$who$ordinarily$is$liable$on$the$contract$
Case:$Krawchuk$v$Scherbak$(2011)$
Liability$of$the$principal$to$the$outsider
An$agent$will$be$personally$liable$on$a$contract$with$an$outsider$when$he$or$she$
(the$agent)$exceeds$his$or$her$actual$or$apparent$authority$
A$representation$of$authority$by$a$person$who$purports$to$be$an$agent$
Warranty$of$authority
Liability$of$the$agent$to$the$outsider
The$general$rule$is$that$the$principal$is$still$liable$ on$the$contract$so$long$
as$the$agent$is$acting$within$his$or$her$authority$
A$principal$whose$identity$is$unknown$to$a$third$party,$who$has$no$knowledge$
that$the$agent$is$acting$in$an$agency$capacity$
Liability$of$an$undisclosed$principal
When$an$agent$exceeds$his$or$her$authority,$the$principal$can$sue$the$agent$for$
breach$of$contract$
Liability$of$agent$to$principal$
As$a$general$rule,$an$agent$is$personally$liable$for$any$torts$that$he$or$she$
commits$
Principal$is$vicariously$liable$of$the$agent's$actions$so$long$as$the$agent$is$acting$
within$express,$implied,$or$apparent$authority$
Liability$for$torts$of$the$agent$
Electronic$agents$are$computer$programs,$or$other$electronic$ means,$used$to$
independently$initiate$an$action$or$to$respond$to$electronic$messages$without$
review$by$an$individual$
Provides$that$a$contract$may$be$formed$by$the$interaction$of$an$electronic$
agent$and$an$individual$
Electronic$Commerce$Act$(Ontario)
Electronic$agents
The$agency$relationship$ceases$by$operation$of$the$law
Most$commonly$occurs$due$to$the$death,$dissolution,$insanity,$or$
bankruptcy$of$one$of$the$parties$
An$agency$agreement$can$come$to$an$end$if:
The$termination$of$the$agency$relationship
Chapter(13
Monday,$November$ 13,$2017
12:12$PM
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