ADMS 2610 Lecture Notes - Fiduciary, Apparent Authority, Independent Contractor
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Copyright Robert Levine
SOME NOTES ABOUT AGENCY:
NOTE: The following notes are in addition to the section on Agency in your text.
The parties involved in agency are the principal, agent and a third party.
TYPES OF AGENCY:
Generally speaking the first kind of agency is one where the principal retains the
services of an agent to effect/make some sort of contract between the principal and the
third party. This is usually done by a direct contract between the principal and the agent:
A, the principal, enters into an agency contract with the agent who is an
independent contractor whose business is to effect contracts for others.
or by the type of relationship between the principal and the agent, normally one of
A, the principal is the employer of B and authorizes B to enter into a contract
with a third party in order to do business.
Here we can say that B is both the employee and agent of A.
A, a partner in a general partnership composed of A, B, C and D enters into
a contract with a supplier for goods to be used by the partnership.
Here we can say that A is the agent for all of the other partners and for the partnership.
TYPES OF AGENCY CONTRACTS:
Agency arises by either oral or written contract, and where the principal enters
into a contract with an agent the terms of the contract spell out what exactly the agent can
do in relation to a third party. Another way of saying this is that the contract specifically
tells the agent what kind of contract the principal wants the agent to procure for him/her
with a third party. Here, we say that the contract between the principal and agent sets
out the agent’s express authority to enter into a contract with the third party on the
principal’s behalf. Thus an agent who is an independent contractor is expressly retained
to effect a contract with a third party for the principal or the employee’s job is to effect
contracts with third parties for his employer.
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