Doctrinal Law School Courses · Business Associations
LESSON 01 / AGENCY
Agency can arise from what people do. Ask who agreed to act, for whose benefit, and who had the right to direct the work.
A principal manifests assent that another act on the principal’s behalf and subject to the principal’s control; the agent consents. Conduct can supply assent. Payment, a written contract, or the label “agent” is unnecessary. Restatement §§ 1.01–1.03.
Agency establishes a relationship. Authority asks whether an act binds the principal. Employee status asks whether control over manner and means supports respondeat superior. Proving one does not automatically prove the others.
Control can be a right to give interim directions, not constant supervision. Ordinary lending protections or a simple sale do not automatically establish agency. Cargill illustrates when the total relationship crosses that line.
Disclosed: the third party knows both the principal’s existence and identity. Unidentified: existence known, identity unknown. Undisclosed: even the existence is unknown. “Partially disclosed” is older terminology for unidentified. § 1.04.
An employee agent is subject to control over the manner and means of work; a nonemployee agent can still have authority to bind a principal. An independent contractor may be an agent or a nonagent. A subagent acts for an appointing agent and, when authorized, the principal. Keep these classifications separate from disclosed, unidentified, and undisclosed principal status. Restatement §§ 1.01, 1.04, 3.15, 7.07.
A boutique owner asks Morgan to buy supplies for the boutique, within instructions Morgan accepts. That can be agency even if Morgan volunteers.
DON'T FALL FOR ITStart with the actual conduct; contractual labels cannot decide the issue.
Source anchor: Restatement (Third) of Agency (2006), §§ 1.01–1.04, 2.01–2.06, 3.01–3.15, 4.01–4.02, 6.01–6.03, 6.10, 7.01–7.07, 8.01–8.15 ↗
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