Corporations(attackoutline)AllenFall[].docVIP

AO -  PAGE 5 Principal-Agent LIABILITY AGENCY RELATIONSHIPS: relationship between two people (Principal and Agent) where the Pr. bestows a legal power on A, accepted by A. (Neither written agreement nor intent is necessary). Pr. can be disclosed, undisclosed, or semi-disclosed—identity unk. to 3dP. Principal’s CONTRACT LIABILITY: Pr liable for A’s actions. Q: Was __ really P’s A? Pr. expressed or implied to A ? actual authority.  XE Authority:Actual Pr manifested to A (from perspective of reasonable A) that A should act on Pr’s behalf, subject to P’s control, and A manifested assent or consent? RST(2)-A §26, 144. (if stated explicitly - express authority XE Authority:Express ) (if not stated explicitly, but A reasonably believed his authority went beyond expressed activities- implied/incidental authority, §35, 161? XE Authority:Implied ) E.g.: Creditor (Cargill) was held to be a principal to debtor (Warren) due to Cargill’s significant control over Warren. Jenson Farms v. Cargill (18). 3dP reasonably believed A had such authority (based upon Pr.’s acts) ? apparent authority. XE Authority:Apparent  §27, 159. E.g. Bidder at auction did not have apparent authority b/c 3dP did not believe P had authorized the sale. White v. Thomas (22). (She probably had apparent authority for the larger purchase.) E.g. VP did not have apparent authority to sell and leaseback corporation’s assets even though he was a general agent. Jennings (110). Justification for not requiring statement of P, as with common law: (i) intuition of fairness and (ii) ex-ante efficiency No actual or apparent authority ? possibly inherent power XE Authority:Inherent power . A appears to be Pr: undisclosed Pr. + A’s acts on behalf of Pr for usual transactions in such businesses + on the Pr’s account, although contrary to directions of Pr. §195. General A unauthorized acts: disclosed or partially-disclosed Pr. + general A’s unauthorized acts if ordinarily would have th