BUSINESS LAW

What is agency law?Legal relationship where one party has legal

permission to act for another party

Two primary parties are “agent” and “principal”

Agency – person who acts on behalf of another

Principal –person who gives authority for another to act on their behalf

Types of AgencySpecial Agents

Very limited authority, can only conduct actions for one specific purpose directly stated in agent-principal agreement

General Agents More authority than special agents, but less authority

than universal agents Authority to conduct ordinary business

Universal Agents Unlimited authority, can conduct almost all business for

the principal (rare occurrence) Usually appointed by the power of attorney

Agent Type ExamplesSpecial Agent

A real estate agent who normally sells houses, is appointed to sell furniture within a house but not the actual house

General AgentTraveling salesman, who has authority to conduct

normal business transactions on behalf of a business

Universal AgentWhile principal is traveling overseas, agent can

have authority to sell/manage property

Types of PrincipalsDisclosed

Agent acts on behalf of principal and person that the agent is conducting business with knows the agent is acting for another and knows who the agent is acting for

Partially DisclosedAgent acts on behalf of the principal but never informs

others of the identity of the principal

UndisclosedAgents acts on behalf of the principal but never

acknowledges the fact that they are acting for another or the identity of whom thy are acting for

Duties an Agent Owes to Principal

Act of behalf of principal

Act with care and diligence

Avoid conflict between personal interests

Act ethically with third party connection

Act only within their authority

Act reasonable and avoid any conduct likely to damage principal & their enterprise

Duties Principal Owes to an Agent

Pay agent as agreed upon

Protect agent against claims, liabilities, and expenses incurred by agent requests

Liability to 3rd PartiesAgent may be liable to third parties if they

misrepresent their authority

Principals are liable to third parties for:Contracts made by the agentContractual nonperformance

Power of AttorneyLegal document that you, the principal, create to

give another person, the agent, the legal authority to act for youOften used to for handling finances, medical

decisions, parental rights

Power of Attorney may not represent you in court or change/create certain documents such as your will

Employer Hiring Responsibilities

Employers are required to verify a new hires identity and also verify their eligibility to work To verify a I-9 for is completed an kept on file by

the employer The I-9 is an employment eligibility verification

form

Employers are responsible to ensure that I-9 form is filled out completely and in a timely manner for all new hires

I-9 Form: http://www.uscis.gov/files/form/i-9.pdf

National Labor Relations Board

Agency with the purpose of protecting employees’ rights to organize and have unions to bargain with employers

Prevents unfair labor practices and tries to solves any unfair labor practice that occurs

Employee Contract Clauses

Non-competition clause Agreement between employer and new employee when employee

begins to work for employer Takes effect after the employer/employee relationship has ended Employee cannot be involved within industry after they leave company

and employee often gains something in return Possible purpose of protecting trade secrets Often does not hold up in court as it limits employees earning potential

Confidentiality Agreement Protects valuable information that businesses do not want other

companies/people to know of Common uses are for sales plan, customer lists, formulas for products,

design of products (common for manufacturing, and high-tech field) Gives company legal grounds to pursue lawsuit if agreement is broken