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Agency Cheat Sheet (DRAFT) by

This is a draft cheat sheet. It is a work in progress and is not finished yet.

Creating an Agency Relati­onship

both parties manifest assent to work with one another
agent agrees to work for the princi­pal's benefit
Agent agrees to work subject to the control of the principal
not required
Key component
Manife­sta­tions of Assent


person or legal entity with legal capacity
uninco­rpo­rated associ­ations
cannot be principal because they lack legal capacity


any person or entity with minimal capacity
this can include a minor
Minimal capacity
assent to agency relati­onship, perform tasks on behalf of principal, subject to princi­pal's control

Types of Agents

Servants/ employees
Employer has the right to control the agent's physical conduct of work
Indepe­ndent contractor
Principal does not control or have the right to control the agent's physical conduct of work
Charac­ter­istics of an Indepe­ndent Contractor
high level of indepe­ndence, free to work for other people, paid on fixed fee, typically owns his own tool

Termin­ating an Agency Relati­onship

How to
Either party can terminate an agency relati­onship unilat­erally

Contract Liability

Is principal bound?
Depends on authority
Actual Express Authority
commun­ication between agent and principal. need subjective and objective (reaso­nable) intent; terminates upon death (or knowledge of death)
Actual Implied Authority
Commun­ication between principal and agent. take whatever steps are necessary to achieve princi­pal's objective. Implied authority to act within general trade usage or accepted business customs.
Apparent Authority
Commun­ication between principal and third party
No pre-act commun­ica­tion. Ratifi­cation requires that (i) the principal has knowledge of the material terms of the contract and (ii) the principal then accepts the contract’s benefits.

Disclosure of Principals

Disclosed principal
Third party knows agent is acting on behalf of principal and the princi­pal's identity
Partially disclosed principal
Third party knows the agent is working on behalf of a principal but not the princi­pal's identity
Third party does not know agent's status as agent nor the princi­pal's identity. Whether principal is party to contract depends on agent's authority

Princi­pal's Liability for Torts

Vicarious Liability
A principal may be liable for the tortious acts of his agent. Need sufficient control and action within scope of employment
Signif­icant deviation from an assigned path; outside scope of employment
De minimis deviation from an assigned path; within the scope of employment
Intent­ional Torts
Generally, outside scope of employment

Fiduciary Duties- Agent

Duty to exercise reasonable care
Duty to obey reasonable instru­ctions
Duty of loyalty and care apply only to partners, not prospe­ctive partners or former partners
Duty of loyalty
agent cannot usurp a business opport­unity, take in secret profits, or compete in competing business with the principal