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Employees who deal with 3rd parties are generally considered
agents.
Independent Contractors
often are agents of those who hire them, BUT theydo not have control over the details oftheir physical performance. The boss ofan independent contractor can tell them WHAT to do, but not HOW they do it,essentially.
Employee or Independent Contractor?
What’s the difference?
The more control that an employer has over thework being done, the more likely that the person is an employee.
Agency Formation
Must be Consent, Control, but NOTConsideration—you can have gratuitous agency relationships.
Agency By Agreement
the common form of agency. Normally an agency is formed by an ExpressAgreement between the Principal and the Agent, either in writing orverbally. HOWEVER, the agreement can alsobe IMPLIED by the conduct of the parties.
Agent’s Duties
Agent is a fiduciary of the principal, becauseprincipal has given agent power to act on his behalf; special trust, thereforespecial duties
Agent's duties:
Care/Performance
the agent must use Reasonable Care, Diligence,and Skill, meaning that of a reasonable person under similar circumstances,UNLESS the agent purports to have special skills (realtor, CPA, etc.) in whichcase it is the reasonable care, diligence, and skill of that sort ofprofessional
Loyalty
1. Confidentiality
2. Undivided LOyalty
agent MUST act SOLELY for the principal’sbenefit, not his own benefit or that of another person
1. Confidentiality—can’t disclose information or knowledge gained throughthe agency relationship, and can’t use it for your own advantage. NOTE: this fiduciary duty persists during AND after the agency.
2. Undivided Loyalty—problems with doing business with your principal ortrying to act for two principals. It’srisky but OK, IF the agent discloses this to the principal(s) and the principal(s)agree to it. Dual agency is common inreal estate, but law requires that disclosure and acceptance of dual agency bein writing for real estate.
Disclosure/Notification
agent has the duty to keep principal informed ofall matters that relate to the agency. Notice given to an agent is Notice given to the principal. Obvious reasons.
Principal’s Duties to Agent
Compensation
Cooperation
Reimbursement &Indemnification
a principal must pay an agent for servicesrendered, UNLESS agent is acting gratuitously
Youhave to help, or at least, permit, the agent to do his job/duties, and you, asprincipal, MUST NOT do anything to hinder or prevent performance of thoseduties.
A principal must reimburse an agent for moneyspent at the principal’s request OR for necessary expenses. A principal must also indemnify the agent forliability incurred because of AUTHORIZED acts (but not crimes).
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