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agency, apparent authority, inherent agency power


This Essay explores the history of formulations of agency doctrine, arguing that agency law can best be rationalized as a distinctive subject by recognizing that an agent acts as an extension of the principal. The Essay relies on historical material related to the drafting of the Restatements of Agency, the disagreements among Reporters and other participants about the contours agency law, and the intellectual backdrop against which these experts worked. Their disputes, preceded as they were by challenges to the fundamental coherence of agency law, led to successive formulations of agency doctrine; while attempting to provide a comprehensive level of generality, some formulations threatened to distort established limits on the scope of a principal's responsibility for the actions of an agent.

To explain that distortion, this Essay proceeds first by outlining the debates over the status of agency law as an independent branch of law and the ALl's struggles to define agency law. It then delves into the history and development of inherent agency power as a doctrine, through its inclusion in the Restatement (Second) of Agency and culminating in the doctrine's rejection by the Restatement (Third). The doctrine of inherent agency power originated as a sort of catch-all (termed a "third bottle") for cases in which an agent had neither actual nor apparent authority, but nonetheless was able to subject the principal to liability to third parties. Inherent agency power generalized these as situations arising from the agency relationship itself and where the protection of third parties from harm was sought. As a distinct doctrine, inherent agency power risked situations in which a principal would be subject to liability on a transaction entered into by an agent when a third party had notice that the agent lacked authority.

This Essay then explains the impact of inherent agency power doctrine on agency law. The perceived necessity for inherent agency power stemmed part from definitions of apparent authority that were unduly narrow. Tying the themes of the discussion together, the Essay returns to the distinctiveness of agency doctrine among common-law subjects, a distinctiveness that does not require the use of generalizations that lack clarity and normative content.

Library of Congress Subject Headings

Agency (Law), Restatements of the law