BOOK I.

PRINCIPAL AND AGENT.

THE LAW OF AGENCY,

Introduction.

CHAPTER I.

PRELIMINARY TOPICS.

В§ 1. Representation in the law of obligation.

Legal obligations are either primary antecedent obligations

or secondary substituted obligations. The obligation to fulfil

a contractor the obligation not to assault another, is primary.

The obligation to pay damages for not fulfilling a contract, or

for assaulting another, is secondary or substituted, and arises

only as a consequence of the breach of the primary one.

The primary obligations are imposed either by one's volun-

tary undertaking or by the law, irrespective of one's volition,

upon grounds of public policy or utility.' Usually the volun-

tary undertaking originates in an offer or a representation

made to another person and acted upon by him. Thus a con-

tract or a gratuitous undertaking or a representation may,

when acted upon by another person, impose an obligation

which could not have existed but for the obligor's voluntary

act. On the other hand, the obligation not to assault or

defame another, or not to convert another's goods, is imposed

upon every man in society without any act or consent of his.

The secondary substituted obligations arise from an act or

omission resulting in a breach of a primary obligation. If

^ Voluntary primary obligations have been termed "recusable obliga-

tions," while involuntary primary obligations have been termed " irre-

cusable obligations." AVigmore, 8 Harv. Law Rev. 200; Harrimau on

Cont. p. 6.

4 AGENCY.

the j)riiiiary obligation was voluntary, it may have been a

contract, a representation, or an undertaking either not

amounting to contract or extending beyond it. In the first

case we call the failure to fulfil the obligatiijn a breach of

contract ; in the second, misrepresentation, fraud, or deceit; ^

in the third, negligence. If the primary obligation was an

involuntary one, we call the breach of it a tort, and we have

various special names for these torts, as assault, defamation,

conversion, negligence, etc.

Most of the things which a man may do in person he may

do through a representative; accordingly, he may create a

voluntary primary obligation through a representative, or he

may through a representative commit a broach of a primary

obligation, and thus imj)ose upon himself a secondary substi-

tuted obligation. Representation, therefore, is of great

importance in the law of obligation. It creates a subsidiary

range of obligations differing from the main range only in the

fact that the one obliged acts mediately through a represen-

tative, instead of immediately in person.

The problem reduced to its simplest terms is to discover

when and under what circumstances a man is obligated by the

act of his representative, either (1) in creating or attempting

to create voluntary primary obligations, or (2) in committing

a breach of primary antecedent obligations and thus giving

rise to secondary sul)stituted obligations. It is obvious that a

representative might naturally be authorized to create pri-

mary obligations, but would not ordinarily be authorized to

commit breaches of them. Agencies would therefore be

expected to be created for the first purpose, but not for the

second. But even if an agency be created for the first pur-

pose, the agent may go beyond his actual authority and make

1 Deceit and like wrontj^.s are anomalous. The obligor imposes upon

himself the oMigation by his own representation, acted upon by the other

party, and conunits a breach of it at once in consequence of its falsity.

This results in the secondary obligation to pay damages, or to make

restitution, or it works an estoppel, according to circumstances. Owing

to some peculiarities of classification and procedure, deceit h;is come to

be regarded as a pure tort, but in several essential particulaVs it is more

nearly allied to contract. See post, p. 12.