Above the Law: The Agency Relationship

The agency relationship is made up of a principal, and an agent acting on behalf of the principal. An array of issues arises, though, about the rights and responsibilities between principals and agents. In this activity, we analyze a fictional scenario involving a law firm, Above Bar (AB), and Above the Law (ABL), a seller of legal research tools and textbooks.

CONCEPT REVIEW:

Agency law is important because it facilitates commercial activity. It lets you empower someone else to negotiate or work on your behalf. As a result, it's at the center of the employee/ employer relationship, and so is really the foundation of the economy. Because it is so important, the rights and duties that agents owe to principals, and principals owe to agents are highly regulated.

Comprehension Case

Above the Law

Read the text below and answer the questions.

Suppose that Above the Law (ABL), a seller of legal research tools and textbooks, hires the law firm, Above Bar, to represent them in an ongoing dispute with NexusNow, a competing legal research firm, over the rights of a new online legal research search engine. AB assigns a young associate, Amanda, to take the lead on the case. ABL notifies NexusNow that they have retained AB to defend them. Being her first big case, Amanda is unsure of how best to proceed so when NexusNow contacts Amanda with an offer to settle, she enters into negotiations without informing either AB or NexusNow. Sensing that Amanda is relatively inexperienced, NexusNow offers her a job as an in-house counsel. She accepts, and represents both ABL and NexusNow for a period of two months. After that time, she resigns from AB and discloses confidential information that she has learned to NexusNow. On the side, Amanda continues to represent clients that she had while working at AB.

Does Amanda have the authority to continue representing her AB clients? What type of authority is applicable, and what would AB have to do to terminate it?