Why is agency law important

This leads us to the conclusion that a contract entered into by a third party and an agent where the identity of the principal was undisclosed, both the principal and the agent are liable. Therefore, Giorgio can either sue me or Delilah for breach of contract. Copyright Privacy Policy Contact Us. Importance of Agency Law in Business Environment. Related Posts. September 14, Merits and Demerits of Heuristic Method September 2, Proposals That Are Not Offers.

Invitations to Bid. The UCC Approach. Duration of Offer. Irrevocable Offers. Revocability under the UCC. Irrevocability by Law. Rejection by the Offeree. Acceptance with Counteroffer. The UCC and Counteroffers. Lapse of Time. Death or Insanity of the Offeror. Destruction of Subject Matter Essential to the Offer. General Definition of Acceptance. Who May Accept? When Is Acceptance Effective?

Instantaneous Communication. Stipulations as to Acceptance. Electronic Communications. Silence as Acceptance. Real Assent. Physical Duress. Duress by Threat. Misrepresentation Learning objectives.

General Description. Fraudulent Misrepresentation. Misstatement of Fact. Statement Made False by Subsequent Events. Statements of Opinion. Misstatement of Law. Assertions of Intention. Intentionally Made Misrepresentation.

Nonfraudulent Misrepresentation. Negligent Misrepresentation. Justifiable Reliance. Innocent Misrepresentation. Mistake by One Party. Unilateral Mistake. Mutual Mistake. Material Effect on the Agreed-to Exchange of Performance. The General Rule. Exceptions and Complications. Nonvoidable Contracts. Misrepresentation of Age. Duty to Return Consideration Received. Tort Connected with a Contract.

Mentally Ill Persons. Misrepresentation by Concealment. The Purpose of Consideration. The Concept of Legal Sufficiency. Actual versus Legal Detriment. Adequacy of Consideration.

Applications of the Legal Sufficiency Doctrine. Threat of Litigation: Covenant Not to Sue. Accord and Satisfaction Generally. Settling an Unliquidated Debt. Settling a Disputed Debt. Unforeseen Difficulties. Preexisting Duty. Illusory Promises.

Exclusive Dealing Agreement. Promises Enforceable without Consideration at Common Law. Past Consideration. Voidable Duties. Promissory Estoppel.

Moral Obligation. Promises Enforceable without Consideration by Statute. Under the UCC. Types of Bargains Made Illegal by Statute. Gambling Contracts. Sunday Contracts. Common-Law Restraint of Trade. Sale of a Business. Employment Noncompete Agreements. Unconscionable Contracts. Exculpatory Clauses. Effect of Illegality. Party Withdrawing before Performance.

Party Protected by Statute. Party Not Equally at Fault. Excusable Ignorance. Form and Meaning. Overview of the Statute of Frauds.

Types of Contracts Required in Writing and the Exceptions. Promises to Pay the Debt of Another. Agreements of Executor or Administrator. The Marriage Provision. Contracts Affecting an Interest in Real Estate. The One-Year Rule. Other Writing Requirements. Exceptions under the UCC. The Ten-Day-Reply Doctrine. Sufficiency of the Required Writing. At Common Law. Effect of Noncompliance and Exceptions; Oral Rescission.

Full Performance. Detrimental Reliance. Oral Rescission. The Purpose of the Rule. Parol Evidence at Common-Law. The Rule. The Exemptions and Exceptions. Not an Integrated Contract. Void or Voidable Contracts. Contracts Subject to a Condition Precedent. Untrue Recital or Errors. Postcontract Modification. The General Problem. The Basic Rule of Interpretation. Third-Party Rights. The Concept of a Contract Assignment. Method of Assignment. Manifesting Assent. Acceptance and Revocation.

Effect of Assignment. General Rule. When Assignments Are Not Allowed. Material Change in Duties of the Obligor. Assignment of Personal Rights. Assignment Forbidden by Statute or Public Policy. Contracts That Prohibit Assignment. Future Contracts. Partial Assignments. Successive Assignments. Basic Rules Regarding Delegation. Effect on Obligor. Nondelegable Duties. Personal Services.

Public Policy. Two Types of Third-Party Beneficiaries. Creditor Beneficiary. Donee Beneficiary. Discharge of Obligations. Discharge by Performance or Nonperformance of the Duty. Nonperformance, Material Breach. Substantial Performance. Condition of Timeliness. Mutual Rescission. Substituted Agreement. Death or Incapacity of a Personal Services Contractor.

Destruction or Deterioration of a Thing Necessary for Performance. Performance Prohibited by Government Regulation or Order. Common-Law Impracticability.

Commercial Impracticability. Cancellation, Destruction, or Surrender. Power of Avoidance. Statute of Limitations. Purpose of Remedies. Types of Damages.

Compensatory Damages. Incidental Damages. Consequential Damages. Nominal Damages. Liquidated Damages. Types of Remedies in Equity. Specific Performance. Total Nonperformance by Breaching Party. Part Performance and Then Breach. Mitigation of Damages. Loss of Power of Avoidance. A corporation comes into existence when the incorporators file state-required documentation with the secretary of state.

Running a corporation is very complex and includes issues of agency law. Agency law principles allow corporations to act.

In an agency relationship, there is a principal and an agent. It is the principal in the agency relationship. A corporation can only act through a board of directors; the board is, in essence, the brains of the operation. See our article on mechanics liens.

Any limited liability entity must have agents to act for it. That is true of corporations, limited liability companies and limited partnerships. Usually those agents are managers, directors, officers and employees. All have a fiduciary duty to the entity, can bind the entity, and are subject to the corporate opportunity doctrine. In reality, the above are only a small sampling of the myriad agency relationships that can be created. Almost all of us are both principals and agents in a dozen or more relationships all the time-if you work or are an independent contractor, you are an agent.

If you are an officer of your church or a community group, you are an agent. If you employ an accountant, a nanny, a secretary or are on the board of a little league team, you are a principal with agents reporting to you.

It is an inherent part of social and legal life. And there are as many additional types of agency relationships as there are conceivable delegation arrangements between people and between people and entities. Such a relationship is based on an agency contract. The rights and duties of the agent and principal are in accordance with the express or implied terms of the contract. With the exception of implied agency discussed below, to create an agency, the consent of the agent and the principal is necessary.

The principal must intend that the agent act for him or her, the agent must intend to accept the authority and act on it. The intention of the agent and the principal must be either in express terms of the contract or can be inferred from the conduct of the parties.

An agency relationship can arise only at the will and by the act of the principal. Existence of agency is always a fact to be proved by tracing it to some act or agreement of the alleged principal. Note that there are two types of agency: 1 actual, either express or implied , and 2 apparent. The relationship of an agent and a principal may also arise by estoppel, necessity or operation of law. In transactions conducted by parties through an intermediary, whether an agency relation has been created depends on the intention of the parties.

In such cases, terms used to designate the capacity of the intermediary in the written instrument attending the transaction are not always conclusive.

Factors to be considered in determining if there is an agency and which party is the principal of the intermediary include the duties of the intermediary, the exercise of such duties, and the personfor whose benefit they are being performed. Carr v. Hunt , S. Dallas An agency is defined as a contract, either express or implied, by which one of the parties confides to the other the management of some activity or business, to be transacted in his or her name, or on his or her account, by which that other assumes to do the actions or business, and to render an account of it.

Express agency is an actual agency created by the written or spoken words of the principal authorizing the agent to act on behalf of the principal. In express agency, authority is directly granted to or conferred upon the agent or employee in express terms, and it extends only to such powers as the principal gives the agent in direct terms, with the express provisions controlling. Kurtz v. Farrington , Conn.

An agency relationship can be either express or implied. In other words, implied agency involves permission to act, even though permission is not explicitly established orally or in writing. An implied agency is frequently established by the conduct and communication of the parties and the circumstances of the particular case. Keytrade United States v.

Generally, one should look from the viewpoint of the principal and the agent to determine whether the agent has implied authority. O rleans Parish Sch. However, if a third party reasonably believes that such agency exists predicated on the acts or omissions of the principal, then implied agency can be created. That is the essence of apparent agency. It is basic agency law that an agency relationship may be implied, inferred, or based on apparent authority.

Implied or inferred agency is actual authority given implicitly by the principal to his or her agent circumstantially proved, or evidenced by conduct, or inferred from a course of dealing between the alleged principal and the agent. Authority can be implied only from facts. Implied powers must be based on some act or acquiescence of the principal, express or implied. Anderson v. Brock Investor Servs. Note that apparent agency is a variation of implied agency.

If a principal acts in a manner such that third parties can reasonably assume an agency exists, then the courts may impose an agency even if the principal did not mean to create one.