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Lecture 7

ADMS 2610 Lecture 7: B.Law10th ppt notes Ch15

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York University
Administrative Studies
ADMS 2610
Rudi Lof

Law of Agency  The Role of an Agent  Historical Development  Nature of Relationship ➢ Agency by Express Agreement ➢ Duties of the Parties ➢ Agency by Conduct ➢ Agency by Operation of Law  Overview  Ratification  Third Parties ➢ Disclosed agency ➢ Undisclosed agency ➢ Fictitious agency ➢ Undisclosed principal  Liability of Principal and Agent  Termination  Role of an Agent  Agency  Law deals with relationship between principal and agent  Principal  A person on whose behalf an agent acts  Agent  A person appointed to act for another, usually in contractual matters  Agency  Characteristics ➢ Arises by express agreement, conduct, or necessity ➢ Involves 3 parties: principal, agent, third party ➢ Legal principles and conditions under which an agent can bind a principal to a contract  Nature of Relationship ➢ Governed by tort law, contract law, and equity ➢ Agent is one who is empowered on behalf of another ➢ Acts of agents bind principals if done within scope of power ➢ Can act for more than one principal at the same time (insurance agents) ➢ Minors can act as agents  Nature of Relationship  Agency ➢ Expressed: can be established by express agreement, either written or oral ➢ Conduct: agency inferred from the actions of the principal ➢ Simple Agency Relationship  Express Agreement  Governed by contract law ➢ Contractual rules must be followed ▪ Statute of Frauds, formal contracts ▪ Duties set forth in agreement (advantage to a written agreement) ➢ Contracts ▪ Contract one is between agent and principal ▪ Contract two is between principal and third party (although negotiated by the agent)  Duties of the Parties  Good Faith  Both parties must act in good faith ○ Agent must act in the best interests of the principal, not themselves  Principal’s Duties ○ Pay for services by agent ○ Indemnify agent for reasonable expenses  Duties of the Parties  Agent’s Duties ○ Obey lawful instructions of principal ○ Keep information confidential ○ Inform principal ○ Maintain standards required to perform ○ Not delegate duties without permission of principal ○ Keep accounts when required ○ No secret commissions  Agency by Conduct (Estoppel)  Arises by:  Actions which convey impression that one is an agent for another or has conferred authority to act on one’s behalf  Types of Authority  Actual: where expressly given  Apparent: implied from actions  Ability of an agent to bind a principal where the principal has not notified third parties of the restrictions or terminated authority of the agent  Agency by Operation of Law  Operation of Law  Agency that may arise in certain circumstances out of necessity where it is not po
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