Agency is the fiduciary duty that arises when one person (a “principal”) manifests another person (an“agent”) that the agent shall act on the principal’s behalf and subject to the principal’s control and the agent manifests assent or otherwiseconsents so to act.
Actual Authority (§2.01):
Arises where the principal's words or conduct reasonably cause the agent to believe that heor she has been authorized to act
Express in the form of a contract OR
Implied because what is said or done make it reasonably necessary for the person to assume the powers ofan agent
Principal will be bound IF1.Principal gave actual authority to agent and all the agent's actions fall w/in the scope of theauthority givena.This will be the result even if, having actual authority, the agent in fact acts fraudulentlyfor his own benefit UNLESSi.the 3rd party w/ whom the agent is dealing was aware of the agent's personalagenda2.There is no contract but the principal's words or conduct reasonably led the 3rd party to believethat the agent was authorized to act, OR
What the agent proposes to do is incidental and reasonably necessary to accomplish an actuallyauthorized transaction or a transaction that usually accompanies it
A pparent Authority (§2.03)
: Exists where the principal's words or conduct would lead a reasonable person in the 3rdparty's position to believe that the agent was authorized to act, even if the principal and the purported agent had never discussed such arelationship.
“Position of power” (ex: public office)
IF the position carries w/ it agency-like powers2.THEN those who know of the appointment are entitled to assume that there is apparent authority todo the things ordinarily entrusted to one occupying such a position
: Considered held by the agent by virtue of being reasonably necessary to carry out his expressauthority
Authority by virtue of position held : To deter fraud and other harms that may befall individuals dealing w/agents, there is a concept of Inherent Agency power, which is power derived solely by virtue of the agency relation.
Example: Partners have apparent authority to bind the other partners in the firm, their liabilitybeing joint and several, and in a corp, all executives and senior employees w/ decision-making authority by virtue of their declared positionhave apparent authority to bind the corp.
Ag ency By Estoppel (§2.05)
A principal who has not made a manifestation to an agent is subject to liability to a 3rdparty who justifiably is induced to make a detrimental change in position because the transaction is believed to be on the person's account,IFa.The person intentionally or carelessly caused such belief ORb.Having notice of such belief and that it might induce others to change their positions, the person did nottake reasonable steps to notify them of the facts
Liability of Agent to 3
: If the agent has actual or apparent authority, the agent will not be liable for actsperformed w/in the scope of such authority, so long as the relationship of the agency and the identity of the principal have been disclosed.a.IF undisclosed principal THEN both the agent and the principal are liable
Liability of Agent to Principal:
If the agent has acted w/out actual authority, but the principal is nevertheless boundbecause the agent had apparent authority, the agent is liable to indemnify the principal for any resulting loss or damage.
L iability of Principal to Agent :
If the agent has acted w/in the scope of the actual authority given, the principal mustindemnify the agent for payments made during the course of the relationship whether the expenditure was expressly authorized or merelynecessary in promoting the principal’s business.
An agent owes a fiduciary duty to be loyal to the principal.b.An agent must not accept any new obligations that are inconsistent w/ the duties owed to the principal. Anagent can represent the interests of more than one principal, conflicting or potentially conflicting, ONLY after full disclosure and consentof the principal.c.An agent also must not engage in self-dealing, or otherwise unduly enrich himself from the agency. An agentmust not usurp an opportunity from the principal by taking it for himself or passing it on to a 3rd party.d.In return, the principal must make a full disclosure of all information relevant to the transactions that theagent is authorized to negotiate and pay the agent either a prearranged commission or a reasonable fee established after the fact.