Key Terms
Agent
A person authorized to act for or in place of another.
Principal
A person who authorizes another to act on their behalf.
Agency
A fiduciary relationship — created by express contract or implied actions — in which the agent has authority to act on b
Fiduciary relationship
A relationship in which one person is under a duty to act for the benefit of the other on matters within the scope of th
Definition
The doctrine that imposes vicarious liability on employers for torts of employees acting within the scope of employment.
General agents
Authority to transact all of the principal's business of a particular kind or in a particular place. Examples: partners,
Special agents
Authority only for a particular transaction or specific act. Examples: realtors, athlete's agents, employment recruiters
Authority
The right or permission to act legally on another's behalf.
RULE
The reverse is NOT true. Principals' torts do not flow down to agents and employees.
Public policy rationale
Principals cannot escape liability risk by simply hiring an independent contractor to do dangerous or illegal work.
AGENT DUTIES
Account, Care, Inform, Loyalty, Obedience, Protect confidential information. PRINCIPAL DUTIES: Compensation, Honesty, In
AGENT REMEDIES (principal breach)
Damages OR terminate relationship.
PRINCIPAL REMEDIES (agent breach)
Damages, profit recovery (loyalty breach), rescission (loyalty breach).
TERMINATION TRIGGERS (automatic)
Death, mental incapacity, bankruptcy (if subject matter affected), destruction or illegality of subject matter.