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Agency was once one of those classes that nearly every student took while in law school. It has, in recent decades, fallen out of fashion. By now, it is rarely taught as a standalone class. When it is taught, it is often taught in conjunction with partnership. Alternatively, some students may only run across agency in the context of their first year torts class when they are introduced to the concept of respondeat superior. To a certain extent, the downgrading of agency is a shame. Indeed, it's a critical important part of the law for almost any practicing lawyer and well worth learning.
This chapter of the casebook will focus on agency as a building block for understanding the corporate law. An agency is perhaps the simplest business organization. A principal engages an agent to undertake some activity on the principal's behalf. It turns out that the lessons of authority of agents and the fiduciary duties of agents are important analogues in understanding the corporate law. In fact, once a student has mastered the agency concepts with respect to these two areas, the bright student can by and large intuit the right results in the corporate law.
So, we start with agency – not as an end in and of itself – but as a tool for better understanding and clarifying the issues that will later present themselves when we turn to the corporate law.EDIT PLAYLIST INFORMATION DELETE PLAYLIST
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|1||Show/Hide More||Restatement of Agency|
Unfortunately, the Restatements of Agency are not available as open source documents. In this section you will find links to HeinOnline versions of the Restatement of Agency (3rd) and the Restatement of Agency (2d). Because I cannot edit materials on HeinOnline these links are to the complete Restatements, which will be much more than you need. I will make an effort to help identify the relevant sections of interest to us during the course of the semester.
Although in class I will emphasize the use of the Restatement of Agency (3rd), when you read the cases you will inevitably notice that judges and commentators will often refer to the Second Restatement. This is not because the Second Restatement is somehow “better” than the Third. The Second has just been around longer. In any event, there are a number of substantive changes between the Second and the Third, so it is worth being familiar with Third and how it differs from the previous Restatement.
|2||Show/Hide More||Fiduciary Duties of Parents and Subs|
Stockholders do not normally have fiduciary duties with respect to other stockholders. This principle makes sense for a number of reasons. Stockholders with small stakes have no ability to influence the board of directors and therefore should be free from restrictions in their dealings with other stockholders.
However, this principle is subject to an exception. When stockholders can, through their ownership position influence and control the direction of the corporation, then those stockholders have fiduciary obligations with respect to minority stockholders.
|3||Show/Hide More||Who is an Agent?|
Often the question of who is an agent is contentious. This chapter focuses on the sources of agency, including actual and apparent agency. In addition to the sources of agency is the question of the limits of an agent's authority. It is important to recognize that although there are different sources of authority of agents, that the source of an agent's authority does not matter. In the end, regardless of the source, once a person is empowered with authority, a court will consider that person an agent.
This section examines the role of agency in the franchise form. The franchise business is a common form of business organization. It may be a surprise to learn, but with respect to the franchisee/franchisor, agency plays a critically important role. Indeed, lawyers whose practice involves franchise businesses often become experts in agency law.
This section also spends time on the difference between employees and independent contractors. As you will see, employees are obviously agents. But a more common question relates to independent contractors. Are they agents? And, if so, to what extent can they be considered agents?
|3.4||Show/Hide More||Smith v. Hansen Hansen & Johnson|
|3.6||Show/Hide More||Agency and the Franchise|
|3.6.2||Show/Hide More||Allen v. CHOICE HOTELS INTERNATIONAL|
More on the question of agency in the context of franchise liability.
Question for discussion: what is the plaintiff's best legal theory based on apparent authority. Is the court correct in its conclusion with respect to that theory? Yes or no?
|3.7||Show/Hide More||Independent Contractors v Employees|
|3.7.2||Show/Hide More||Kane Furniture Corp. v. Miranda|
|3.7.3||Show/Hide More||Millsap v. Federal Express Corp.|
|3.8||Show/Hide More||Intentional Torts of Agents|
|4||Show/Hide More||Agency by Estoppel|
|5||Show/Hide More||Obligations of Agents to Principals|
|6||Show/Hide More||Obligations of Principals to Agents|
Brian JM Quinn
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