Agency Law Lecture Notes

Introduction to Agency Law

• Definition: Agency law governs the relationship between agents and principals and the authority of agents to act on behalf of principals.

Key Concepts in Agency Law

Principal-Agent Relationship

• Principal: The party who authorizes another to act on their behalf.
• Agent: The party who is authorized to act on behalf of the principal.
• Fiduciary Relationship: Agents have a duty to act in the best interest of the principal.

Types of Authority

• Actual Authority: Authority expressly given by the principal to the agent.
• Apparent Authority: Authority that a third party reasonably believes the agent has, based on the principal’s actions.

Duties of Agents

• Duty of Loyalty: Agents must prioritize the principal’s interests.
• Duty of Care: Agents must act with competence and diligence.
• Duty to Inform: Agents must keep the principal informed of relevant information.

Duties of Principals

• Duty to Compensate: Principals must pay the agent for services rendered.
• Duty to Reimburse: Principals must reimburse agents for expenses incurred on behalf of the principal.

Termination of Agency

• By Agreement: Termination can occur by mutual consent between the principal and agent.
• By Operation of Law: Death or incapacity of the agent or principal automatically terminates the agency.
• By Revocation/Renunciation: Principal may revoke authority; agent may renounce authority.

Liability in Agency

• Contractual Liability: Principals are bound by contracts entered into by agents with authority.
• Tort Liability: Principals may be liable for torts committed by agents acting within the scope of their authority.

Conclusion

• Understanding agency law is critical in ensuring proper legal and financial accountability in business and personal dealings.