Nature of Agency Relationships

Question 1

Define Agency Relationship

Answer 1

a voluntary, fiduciary relationship between a principal and an agent.

The principal authorizes agent to act on his behalf

Question 2

Two Types of Agency Relationships

Answer 2

1. Gratuitous = principal does not compensate Agent for work on his behalf
2. Contractual = (1) Employer-employee, or (2) employer-independent contractor

Question 3

Define Employer-employee relationship

Answer 3

Employer has the right to control what Employee does and how Employee does it

Question 4

Define Employer-independent-contractor relationship

Answer 4

Employer has the right to control only what independent contractor does, but not how the independent contractor does it