Business Organizations

Agency is the fiduciary relationship that arises when one person (a “principal”) manifests assent to another person (an “agent”) that the agent shall act on the principal's behalf and subject to the principal's control, and the agent manifests assent or otherwise consents so to act. R(3) Agency 1.01

through written or spoken words or other conduct.R(3) Agency 1.03

Prior to severing an employment relationship, an employee may not solicit for himself future business which he would normally be required to solicit for his employer. Even if the other party starts the negotiation, the employee’s fiduciary duty requires that he walk away. Reilly

An employee is free to make such logistical arrangements while still an employee. Hamburger

general knowledge, experience, memory, and skill in establishing [new company] including ‘remembered information. Hamburger. customer lists are not considered trade secrets if the information is readily available from published sources. “An employer who wishes to restrict the post-employment competitive activities of a key employee, where activities do not entail misuse of proprietary information, must protect through a non-competition agreement.”

Act in the best interests of his client or beneficiary, and to refrain from self-interested behavior not specifically allowed by the employment contract.

Duration Geographical coverage Nature of employer’s risk from competition

The presumption that an employment relationship of indefinite duration is intended to be terminable at will may be overcome by evidence of contrary intent, either express or implied. Foley alleged that there were repeated assurances of continued employment and had an exemplary employment record, giving a reasonable expectation of non-discharge. The company personnel manual could be reasonably relied upon to counter the presumption of at-will employment. Further, Foley signed a non-compete for one year—this may be probative towards the issue of intent for continued employment.

Public policy Employee handbooks Violation of a covenant of good faith and fair dealing.

the principal has acted in bad faith and the ensuing transaction between the principal and the buyer is to be regarded as having been accomplished by the agent.

An agent acts with actual authority when, at the time of taking action that has legal consequences for the principal, the agent reasonably believes, in accordance with the principal's manifestations to the agent, that the principal wishes the agent so to act. R(3) Agency 2.01

Is the power held by an agent or other actor to affect a principal's legal relations with third parties when a third party reasonably believes the actor has authority to act on behalf of the principal and that belief is traceable to the principal's manifestations. R(3) Agency 2.03

Respondeat Superior-- An employer is subject to liability for torts committed by employees while acting within the scope of their employment.

Justifiably inducing a 3rd party to make a change in position bc the transaction is believed to be on that person's account--intentionally causing that belief, carelessly causing that belief, or not taking reasonable stps to notify 3rd party of facts

A third party will be able to bind the principal on the basis of apparent authority if the third party reasonably believed that the agent was authorized. If the third party knows that the agent is without actual authority, or if the manifestations by the principal constitute an insufficient foundation for forming a reasonable belief, the agent’s actions will not bind the principal. A principal who puts an agent in a position that enables the agent to commit a fraud while apparently acting within his authority upon a third person is subject to liability for the fraud.