If the agent wrongly owns or should be entitled to property that the principal owns or should be entitled to, the principal may apply to the court to consider it an implied trust – that the agent holds the property on behalf of the principal. [2] [1] In this chapter, we look at the main-agent side of the triangle. In the next chapter, we will discuss relationships between third parties. However, the existence of agents does not require an entirely new law on tortious or contractual liability. An offence is no less harmful when committed by an officer; A contract is no less binding when it is negotiated by an agent. What needs to be taken into account, however, is how an agent acts on behalf of his or her principal and vis-à-vis a third party. An agent is someone who acts on behalf of another. Many transactions are made by agents who act in this way. All corporate transactions, including those involving government organizations, are carried out in this way because the companies themselves cannot really act; they are legal fictions. Agencies can be created explicitly, implicitly or apparently. Recurring issues in agency law include whether the « agent » is really one, the extent of the agent`s authority, and the obligations between the parties. The five types of agents include: general agent, special agent, sub-agent, agency associated with an interest and servant (or employee). The independent contractor is not an employee; Their activities are not specifically controlled by their client, and the client is not liable for social security, social security and other charges.
However, it is not uncommon for an employer to claim that employees are independent contractors when in reality they are employees, and cases are often fought on the basis of the facts. A person whose work is not under the control of the client, but who arranges to perform work for him, is called These tasks are analogous to many of the tasks of the agent that we have just studied. In short, a client has a duty to « not inappropriately interfere in the work [of an agent]. » Reprocessing (second) of the Agency, Article 434. However, the customer is entitled to compete with the representative, unless the agreement expressly prohibits it. The client is obliged to inform his representative of the risks of physical damage or financial loss resulting from the performance of the tasks assigned by the agent. Failure to notify an officer that he or she is travelling to a particular neighbourhood required for work may be dangerous (a fact unknown to the officer but known to the principal) could, under the common law, subject the principal to a claim for damages if the officer is injured while doing his or her work in the neighbourhood. A client is required to pay the funds owed to the executing agencies; The obligation of a contracting entity to do so depends on various factors, including the degree of independence of the agent, the nature of the remuneration and the practices of the company in question. An agent`s reputation is no less valuable than that of a principal, and therefore an agent is not required to continue working for someone who defiles him. For example, in Howard v. Gobel, the director, hired an agent to oversee the construction of the Illinois State Capitol. A dispute arose as to whether the officer was entitled to a lump sum set at the beginning of the project or to an appropriate compensation determined after the completion of the project. The court concluded that there was no agreement between the minds on what the parties had concluded.
The contractor was entitled to fair remuneration for his work on the project. [19] The Client may sue the Contractor for liability caused by unlawful acts of the Contractor, i.e. if a third party obtains a judgment against the Client for illegal acts caused by the Contractor, the Client may sue the Representative for compensation for the damage. [2] [1] In order to achieve their goals, a client usually needs to reveal a number of secrets to their agent – how much they are willing to sell or pay for real estate, marketing strategies and the like. Such information could easily be used to the detriment of the procuring entity if the agent were to compete with the procuring entity or sell the information to those who do so. The law therefore prohibits a representative from using confidential information given or acquired for his own purposes or in a way that would harm the interests of the customer. This prohibition extends to information received from the principal even if it has nothing to do with the agent`s mission: « An agent who is informed by the client of his plans or who secretly examines the employer`s books or memos does not have the privilege of using that information at the expense of his client. » Reprocessing (second) of the Agency, Article 395. The agent is also not allowed to use confidential information after leaving his agency. Although he is free to compete with his former client in the absence of a contract, he is not allowed to use the information he has learned during his agency, such as trade secrets and customer lists.
Section 38.3.3 « Breach of the Duty of Loyalty, » Bacon v. Volvo Service Center, Inc., deals with breach of confidentiality by an agent. Apparent authority (also known as « alleged authority ») exists when the principal`s words or conduct would lead a reasonable person in the third party`s position to believe that the agent was authorized to act, even if the principal and alleged representative had never discussed such a relationship. For example, if a person appoints a person to a position that involves powers similar to those of an organization, those who are aware of the appointment may assume that there is a clear authority to do the things that are usually entrusted to someone in such a position. If a client gives the impression that an enforcement agent is authorized but there is no actual power of attorney, third parties are protected as long as they have acted appropriately. This is sometimes referred to as the « estoppel agency » or the « doctrine of perseverance, » which prevents the client from refusing to grant powers if third parties have changed their position to their detriment by relying on the representations made. [5] Agencies created by consent – agreement – are not necessarily contractually binding. It is not uncommon for one person to act as an agent for another person without consideration. For example, Abe asks Byron to run errands for him: buy wood from his account at the local lumber yard. Such a free agency produces no results other than the most common contract agency. An employee must be distinguished from an independent contractor whose work is not under the client`s control. The difference is significant for tax, workers` compensation and liability insurance purposes.
As these questions suggest, agency law often involves three parties – the principal, the agent and a third party. It therefore deals with three different relationships: between the client and the agent, between the client and the third party, and between the authorised representative and the third party. These relationships can be summarized in a simple diagram (see Figure 11.1 « Agency Relationships »). The analysis of principal-agent relationships is an important topic in economics. The analysis focuses on the information asymmetry between the agent, who is supposed to be well informed, and the principal, who may not be. An agent is usually hired because they have special knowledge or skills that the client wants to leverage. The officer is required by law to perform his or her work with the care and skill that is « customary in the place for the type of work for which he or she is used » and to exercise special skills if these are greater or more refined than those normally employed in the community. In short, the agent is not legally allowed to do sloppy work. Reprocessing (second) of the Agency, Article 379.
A representative owes the client a number of obligations. These include: But the agency relationship is more than a contractual relationship, and the agent`s responsibilities go beyond the limits of the contract. The agency imposes a higher obligation than simply complying with the terms of the contract. .