Agency Fidcuiary Relationship

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Submitted By bobgrahams
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ISSUES Rock star, Herman Phillips, hired retired ABC executive Wilson Bills to “find him work in television.” No written documentation existed of this work relationship, but at meetings with industry people, Phillips said to “work with Bills, he looks after me.” Bills negotiated and signed a six month acting contract with Valley Television Productions on Phillips’s behalf; however, Phillips quit the show two weeks into employment. In a subsequent meeting, Phillips told Bills that he would pay his traveling expenses if Bills could find him another acting gig. The next night in a room at the Bay Hotel, Bills and Phillips were smoking marijuana; Bills’s lit marijuana cigarette caused a fire and burned down the hotel. Phillips was sued by Valley Television Productions for breach of contract and by the Bay Hotel for Bills’s negligence of starting the fire. Bills was also sued by the Valley Productions for breach of contract and filed for unemployment compensation after Phillips terminated their business relationship.
A fiduciary relationship results when one person (the principal) manifests her consent that another person (the agent) will act on her behalf and subject to her control, and the agent manifests his consent to so act. An agency by agreement relationship is based on an express or implied agreement that the agent will act for the principal. As per the Equal Dignity Rule, if a contract being executed by an agent on the principal’s behalf is written, most states require that the agent’s authority must also be evidenced by writing; otherwise, the contract executed by the agent is voidable at the principal’s option. However, a principal’s express or implied affirmation of a previously unauthorized contract made by, or other act of, a purported agent will result in ratification by the principal. Express or implied affirmation entails:…...

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