Business Associations
Summer Term 2015
Adjunct Professor Milt Rowland
M-W-Th 8-9:30 a.m., Room 226
First week assignments:
Wednesday, May 20-Thursday, May 21:
Text: Hamilton, Macey & Moll, The Law of Business Organizations, West Academic
Publishing, 12th ed. 2014
We will spend a week on the contents of Chapter 2, Agency. Because the casebook does a
brilliant job with corporations but skims the (extremely important, basic and practical) law of
agency, we will cover agency law via Restatements (Second and Third) of Agency sections and
cases, which we will use to supplement the text. Please review Chapter 1.
There are four basic subjects in agency law on which we will focus: formation of the relation,
contractual power of agent to bind principal, tort liability of principal for acts of agent within
scope of agency/employment relation, and duties and liabilities of principal and agent inter se.
Our first two classes will cover the following:
Class 1:
Soults Farms, Inc. v. Schafer, 797 N.W.2d 92 (Ia. 2011), quoting Restatement (Third) of Agency §
101) (please only read sections covering agency issue)
Hewson Constr. v. Reintree Corp., 685 P.2d 1062 (1984) (distinguishing agency from other relations)
Burdick v. Horner Townsend, 345 P.3d 531 (Utah 2015). Why doesn’t termination of the agency
relation terminate apparent authority?
Mohr v. Grantham, 262 P.3d 490 (discussing apparent agency as well as apparent authority) (note:
dissenting opinion has nothing to do with agency law, so it may be omitted)
Ranger Ins. Co. v. Pierce County, 192 P.3d 886
D.L.S. v. Maybin, 121 P.3d 1210, citing Restatement (Second) of Agency § 267
Kim v. Moffat, 234 P.3d 279, discussing Restatement (Third) of Agency § 6.03
Hendricks v. Lake, 528 P.2d 491 citing Restatement (Second) of Agency §§ 274, 278, 279
Class 2:
Actual authority: Restatement (Third) of Agency § 2.02; Restatement (Second) of Agency §§ 8A,
161
Chicago Title, 309 P.3d 372
Hoglund, 170 P.3d 37 (implied authority to carry out actual authority; apparent authority), citing
Walker, 413 P.2d 3
Hoddeson, 135 A.2d 702
Restatement (Third) of Agency § 2.05
Restatement (Second) of Agency § 82
Nichols v. McCool, 701 P.2d 1114, discussing ratification and the potential effect of failure to
repudiate
As soon as Twen is available to me, I will post these cases on Twen
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1 Formation of relation:
Restatement (Second) of Agency § 1 Agency; Principal; Agent
(1) Agency is the fiduciary relation which results from the
manifestation of consent by one person to another that the
other shall act on his behalf and subject to his control, and
consent by the other so to act.
(2) The one for whom action is to be taken is the principal.
(3) The one who is to act is the agent.
What “agency” is
Creation of relation—elements: consent, control, acting on behalf of
No consideration needed
Disclosed, undisclosed and partially disclosed principal
Knowledge and notice—impute from A to P
Soults Farms, Inc. v. Schafer, 797 N.W.2d 92 (Ia. 2011), quoting
Restatement (Third) of Agency § 101) (please only read sections
covering agency issue)
Hewson Constr. v. Reintree Corp., 685 P.2d 1062 (1984)
(distinguishing agency from other relations)
Burdick v. Horner Townsend, 345 P.3d 531 (Utah 2015). Why
doesn’t termination of the agency relation terminate apparent
authority?
Mohr v. Grantham, 262 P.3d 490 (discussing apparent agency as
well as apparent authority) (note: dissenting opinion has nothing to
do with agency law, so it may be omitted)
Ranger Ins. Co. v. Pierce County, 192 P.3d
D.L.S. v. Maybin, 121 P.3d 1210, citing Restatement (Second) of
Agency § 267
Kim v. Moffat, 234 P.3d 279, discussing Restatement (Third) of
Agency § 6.03
Hendricks v. Lake, 528 P.2d 491 citing Restatement (Second) of
Agency §§ 274, 278, 279
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2. Contractual power of agent to bind principal:
TP v. P (contract)
Actual authority (express)
Actual authority (implied) (“incidental”) (acquiescence)
Inherent agency power (general agency)
Apparent authority
Implied authority
Ratification
Estoppel
Actual authority: Restatement (Third) of Agency § 2.02; Restatement
(Second) of Agency §§ 8A, 161
Chicago Title, 309 P.3d 372
Hoglund, 170 P.3d 37 (implied authority to carry out actual
authority; apparent authority), citing Walker, 413 P.2d 3
Hoddeson, 135 A.2d 702
Restatement (Third) of Agency § 2.05
Restatement (Second) of Agency § 82
Nichols v. McCool, 701 P.2d 1114, discussing ratification and the
potential effect of failure to repudiate
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We will cover the following during our third class, held Wednesday, May 27:
3. Vicarious liability of principal for torts of agent:
TP v. P (tort)
Master-Servant relation
“servant” v. “independent contractor”
Scope of agency—frolic and detour
Going and coming rule
Restatement (Second) of Agency § 220
O’Brien v. Hafer, 93 P.3d 930
Kelley v. Howard S. Wright Construction Co., 240 P.3d 162
Rodman v. CSX Intermodal, 938 N.E.2d 1136 (2010) (three elements to
scope of employment)
Restatement (Second) of Agency §§ 228-235, 265
Fountain v. Hersey, 2014 L 5408775 (Mich.App. 2014)
We will cover the following materials at the end of our third class, as
time permits, and complete the discussion at the beginning of class
of May 28:
4. Liability of agent to principal and principal to agent:
Duties of P to A
Compensate
Indemnify
Exonerate
Duties of A to P
Fiduciary duties
Due care
Restatement
Restatement
Restatement
Restatement
(Second)
(Second)
(Second)
(Second)
of
of
of
of
Agency
Agency
Agency
Agency
§
§
§
§
437 (duty of good conduct)
438 (duty to indemnify)
439 (duty to exonerate)
387-398, 403 (duty of loyalty)
McKasson, 315 P.3d 1138 (noncompetes clause in employment contract)
In re Estate of Palmer, 187 P.3d 758 (duty to account; fiduciary duties)
Merkley, 420 P.2d 205 (measure of breach of duty of due care; remedy for breach of
fiduciary duty)
V&E Medical Imaging v. Birgh, 2010 WL 4402333, citing Restatement (Third) of Agency
§ 8.03
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