Agency Law is about asking when one party is responsible for the actions of another and what
rights and obligations those parties have to one another.
The question of whether the agent has the authority to act on behalf of the business, when the
business is bound by, or liable for, the actions of its agents, and what duties and
responsibilities an agent might have to a business are concepts that also arise in the study of
partnerships, limited liability companies, and corporations.
How its Formed?
Agency Relationship Requires: (1) one person acting on behalf of another; (2) the agent (A) is
acting subject to the principal’s (P) control; and (3) both A and P have consented to (i) and (ii).
●​ The agent has certain duties and obligations to the principal.
●​ The principal has certain duties and obligations to the agent.
●​ The principal is responsible for tortious acts committed by the agent on a third party that
fall within the scope of the agency.
○​ Asks whether the principal may be found liable for the torts of an agent, even
though the principal was not negligent.
○​ If the agent was an employee of the principal, the principal is liable for torts
committed within the agent’s scope of employment.
○​ To determine if an employee is subject to respondent superior, we must assess
whether the principal had the right to exert control over the manner and the means
by which the agent performed his duty.
●​ The agent has the ability to enter into binding agreements with third parties on the
principal’s behalf, as long as the agreement may be traced to the principal’s authority.
○​ Asks who is bound?
●​ The agent’s knowledge (in the subject matter of the agency) is imputed to the principal.