Description
What is an agency relationship?
When you first begin business operations as a sole proprietor and you are the only employee with only your funds invested within the business operations, would any agency conflicts exist with your company or business? Please provide 166 words,please cite,and provide references.
Explanation & Answer
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What is an agency relationship?
The law of agency is an area of commercial law dealing with a set of contractual, quasi-contractual and non-contractual fiduciary relationships that involve a person, called the agent, that is authorized to act on behalf of another (called the principal) to create legal relations with a third party.
Agent is liable to 3rd party for his own torts.
Principal may be liable for Agent's torts if they result from:
- Principal's own tort.
- Principal's authorization of tort.
- Agent's unauthorized but fraudulent conduct made within scope of agency.
- Respondeat Superior .
Agent's Negligence
- Applies only to Employer-Employee relationships and not to Employer-Independent Contractor relationships.
- Principal/Employer is vicariously liable for Agent/Employee's negligence if committed within the Agent's "course and scope of employment."
--This is the doctrine of respondeat superior.
Scope of Employment
Employer is liable for:
- E'ee act authorized by employer
- was commonly performed by employees
- act advance employers interests
- did employer have reason to know employee would do the act
-was the act of detour
Employer not liable:
- act infrolic
- based in a serious crime
Agents Intentional Tort
- Principal liable for intentional torts committed within the scope of employment.
-- Employee is liable as a tortfeasor as well.
- Employer is liable for Employee's acts which Employer knew or should have known the Employee had a propensity to commit.
- Applies to Employer-Employee relationships and not to Employer-Independent Contractor relationships.
--Exception: hazardous activities
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