LEGL 2700 Chapter Notes - Chapter 9: Fiduciary, Independent Contractor

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1. Agency a consensual relationship under which one person (the agent/employee) acts on
another’s the principal/employer behalf and subject to his/her control
a. Agent employee or independent contractor (owe employer a fiduciary duty)
2. Duties of Agents and Principals (fiduciary duty)
a. Agent Responsibilities
1) Duty of Loyalty act in company’s best interest don’t use info for self
2) Duty of Obedience obey instructions of employer
3) Duty of Care avoid negligence
b. Principal Responsibilities
1) Compensation workers comp
2) Indemnification pay agents for expenses in carrying out principal’s orders
(ex: travel expenses)
3. Termination of Agency Relationship
a. Termination by the principal or agent
b. Lapse of Time
c. Purpose Achieved
d. By Operation of Law
e. If the act becomes illegal, someone dies, etc.
4. Principal’s Liability for Agent’s Conduct
a. Tort Liability varies depending on whether the agent is an employee or
independent contractor
1) If it is an employee then the principal is liable for their torts
2) They are not liable if its an independent contractor (ex: construction worker
or someone who is brought in from outside)
3) Differentiating: how much control, how long is the person employed, what is
the method of payment, work done under employer’s control, does the
employer supplies the tools, what degree of skill is required
b. Tort Liability for Employee
1) Principal is liable for both intentional and negligent conduct of employees
while acting in the scope of employment (vicariously liable)
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