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22 Agency.

treatment of tlie law of agency, — first, because an agency may

be created otherwise than by contract between the constituent

and the representative, and second, because a constituent,

whose will is thus represented, may be made liable to third

persons in cases where the representative proves careless, in-

competent, or perverse, and even where he acts in direct oppo-

sition to the express commands of the constituent.

The third view is, in a sense, subordinate to the second, for

In cases where the representative acts as for himself and not

for his constituent, or where he acts in excess of authority, or

wrongfully, he may incur legal obligations to third persons as

well as to his constituent, and may, in some cases, acquire

legal rights against third persons. The subject of agency is

therefore divided, logically, into two great parts :

(I.) The law of principal and agent ;

(IT.) The law of master and servant.

Each of these parts is divided into four parts :

(1) The formation of the relation, either as regards obliga-

tions subsisting between constituent and representative, or as

regards the authority of the representative to act for the con-

stituent. Incidental to this is the subject of the termination

of the relation.

(2) The mutual rights and obligations of the constituent

and representative as to each other.

(3) The mutual rights and obligations of the constituent

and third persons growing out of the exercise of authority by

the representative.

(4) The mutual rights and obligations of the representative

and third persons arising from the acts of the representative.

PART I.

FORMATION AND TERMINATION OF THE RELATION OF

PRINCIPAL AND AGENT.

В§ 9. Introductory.

The inquiry whether the relation of principal and agent

has been formed or exists may arise either in a controversy

between the principal and agent, or between the principal

and some third person with whom the agent has dealt, or

between the agent and such third person. To avoid useless

repetition, this part of the work will therefore discuss the

formation of the relation as concerns any one or all of these

possible cases. For the one or the other of these purposes

the relation may be formed in any one of four ways: (1) by

agreement; (2) by ratification ; (3) by estoppel; (4) by neces-

sity. In addition to a consideration of the methods of form-

Ing the relation, this part will also discuss the methods by

which the relation may be terminated.

The problem of whether the relation has been established

as between the principal and third persons involves the doc-

trines of ostensible, as distinguished from actual, agency, doc-

trines more fully treated under the head of estoppel.

It should also be noted that much, but not all, of what

follows is applicable to the formation of the relation of master

and servant. Accordingly some cases cited have to do with

master and servant so far as concerns the formation of the

relation of employer and employee.

2-4 FORMATION OF AGENCY

CHAPTER 11.

FORMATION OF THE RELATION BY AGREEMENT.

В§ 10. Elements of agreement.

Agrecinent is a broader term than contract. It implies,

however, an offer and acceptance, or a meeting of the minds,

or manifestation of the meeting of the minds, of the parties.^

Accordingly an agency by agreement is one where the princi-

pal and agent mutually consent to the formation of the rela-

tion. Such an agreement may amount to a contract, or it

may fall short of contract. If it amount to a contract, it is

binding as between principal and agent, and when acted upon

may bind the principal to third persons or third persons to

the principal. If it falls short of contract, it will not bind

the principal and agent as a contractual obligation, but is

good as an appointment of an agent, and if acted upon by

the agent under such appointment may bind the principal to

third persons or third persons to the princii)al, and may

render the agent liable to the principal for misfeasance.

The assent of the principal may be express or implied, and,

as to third persons, it may rest upon a holding out giving rise

to an estoppel to deny the assent.^ It may be subsequent to

the act of the agent and amount to ratification.*^

The assent of the agent may be express or implied. It is

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