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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. The materials in this chapter should be read in conjunction with accomplishing the online Agency module, which is available on the course website (bc.edu/lms). The Agency module will provide you with an overview of the most important concepts of agency. The module consists of material from the Restatement (3rd) of Agency along with lecture sequences and review questions. Once you have completed the module, there is an online quiz that is intended to reinforce and extend the lessons of agency learned in the module.
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 you have mastered the concepts of agency 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||Who is an Agent?|
Often the question of who is an agent is contentious. This is because when an agent takes an action in connection with the agency, that act has legal consequences for the principal. 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.
|2.1||Show/Hide More||Dweck v. Nasser (I)|
|2.2||Show/Hide More||Smith v. Hansen Hansen & Johnson|
|3||Show/Hide More||Agency by Estoppel|
|4||Show/Hide More||Obligations of Agents to Principals|
Agents stand in fiduciary relation to their principals. As such, agents have fiduciary obligations to the principal. The Restatement outlines a s series of fiduciary obligations that an agent has with respect to the principal. The most important of these are the duty of care and the duty of loyalty.
The fiduciary obligations of agents with respect to principals can be understood as an analogue to fiduciary obligations of corporate directors in the the corporate law context.
|5||Show/Hide More||Obligations of Principals to Agents|
Brian JM Quinn
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