The Law of Agency (Lesson 13)

Because of the ubiquity of principal-agent relationships in the business world, we will spend an entire lecture on the law of agency in our next class (3/21).

Although we have been focusing mostly on the founding of Facebook this semester, let’s take a “time out” from Facebook, and let’s instead consider the fictional world of secret agent 007 James Bond. In legal terms, Mr Bond works for the British secret intelligence service, known as “MI6” for short. Mr Bond is thus the AGENT, while MI6 is the PRINCIPAL. Whenever we see a principal-agent relationship, an important legal question that often arises is this: When is the principal legally liable for the acts committed by its agents? Under the legal doctrine of respondeat superior, the answer depends in large part on whether the principal’s agents are employees or whether they are independent contractors.

Consider, by way of example, the opening car chase sequence in the film “Skyfall,” in which James Bond and fellow secret agent Eve Moneypenny chase some bad guys and appear to cause various property torts against merchants of the Grand Bazaar, a huge market located in Istanbul, Turkey (a map of which is pictured below), where this car chase sequence takes place. Now, let’s imagine what would happen if the owner of the Grand Bazaar were to sue MI6 in tort for the negligent acts of MI6’s agents James Bond and Eve Moneypenny. Would MI6 be legally liable under the law of agency — specifically, under the doctrine of respondeat superior — for the property damage caused by secret agents Bond and Moneypenny in the course of their mission?

To answer this question, we will re-enact a hypothetical legal proceeding in our next class: Grand Bazaar vs. MI6. We will need several student volunteers for this in-class assignment:

  1.  Barrister-at-law* for the Grand Bazaar: Your mission, should you decide to accept it, is to argue why MI6, the principal, is legally liable for the torts (property damage) caused by its secret agents James Bond and Eve Moneypenny during the car chase scene in the Grand Bazaar.
  2. Barrister-at-law* for MI6: Your mission is to argue why MI6, the principal, is not legally liable for the tortious act of its secret agents James Bond and Eve Moneypenny.
  3. Barrister-at-law* for the secret agents: Your mission is to argue why your clients James Bond and Eve Moneypenny did not commit any torts, i.e. are not themselves directly responsible for the property damage that occurred during the car chase.
  4. The Jury: The class as a whole will play the role of the jury.
[*] Note: A barrister is how a trial lawyer is referred to in England.

About F. E. Guerra-Pujol

When I’m not blogging, I am a business law professor at the University of Central Florida.
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