Opinion ID: 1198944
Heading Depth: 1
Heading Rank: 3

Heading: Principles of Agency Law

Text: The law of agency supports a conclusion that Fey and the joint venture were agents of the Zoo, an entity which is exempt from the seat tax. The joint venture agreement did not speak specifically to the issue of agency. Section 2.10, which the majority relies upon, provided the following: Independent Contractor. Nothing in this Agreement shall be construed nor shall it be construed that FEY is an employee of Zoo nor shall it be construed that FEY is a joint venturer of the Zoo other than for the Zoofest for the Summer of 1993 as provided for herein. But this contractual provision lends little guidance on the issue of the agency's existence or non-existence, because an independent contractor may or may not be an agent; whether or not the person is an agent depends on the circumstances of the undertaking. See Restatement (Second) of Agency § 2 (1958). In Stortroen we determined that the selling broker in a real estate transaction is an agent of the listing broker, and as such is within a chain of agency to the seller. See Stortroen v. Beneficial Fin. Co., 736 P.2d 391, 393 (Colo.1987). Although there was no written contract between the selling broker and the listing broker establishing agency, we held that the basic structure of the relationship made the selling broker an agent of the listing broker and, consequently, a subagent of the seller. See id. at 399. Agency is the fiduciary relation which results from the manifestation of consent by one person to another that the other shall act on his behalf and subject to his control, and consent by the other so to act. Restatement (Second) of Agency § 1(1). Agency is ultimately a question of the intention of the parties and is evidenced by their acts and not on what the relationship is called. Moses v. Diocese of Colorado, 863 P.2d 310, 324 (Colo. 1993). An agent is generally one who acts for or, in place of, another, or is entrusted with the business of another. Id. The control a principal exercises over the manner of work performed by an agent is evidence of agency. See id. No one factor, including control, is determinative, and the most important factor in determining whether a person is an agent is the right to control, not the fact of control. Id. The essential characteristics of an agency relationship are that (1) the agent holds a power to alter legal relations between the principal and third persons and between the principal and the agent, see Restatement (Second) of Agency § 12; (2) the agent is a fiduciary with respect to matters within the scope of agency, [5] see id. § 13; and, (3) the principal has the right to control the conduct of the agent with respect to matters entrusted to the agent, see id. § 14. As we explained in Stortroen, an agent may further delegate its authority to subagents. See Stortroen, 736 P.2d at 395. A subagent is a person appointed by an agent empowered to do so, to perform functions undertaken by the agent for the principal, but for whose conduct the agent agrees with the principal to be primarily responsible. Id. (quoting Restatement (Second) of Agency § 5(1)). Independent contractors may or may not be agents or subagents: the attorney-at-law, the broker, the factor, the auctioneer, and other similar persons employed either for a single transaction or for a series of transactions, are agents, although as to their physical activities they are independent contractors. Restatement (Second) of Agency § 1 cmt. on subsection (3). The critical factor is that an agent is a person authorized by another to act on his account and under his control. Id. The authority to perform a particular act may be conferred by specific words of a statement to the agent, by directing an agent to perform acts, or by inference from words or conduct. See id. § 26 cmt. c. If the authorization is ambiguous, the interpretation acted upon by the parties controls. Id. § 43. A partnership, such as a joint venture, also may be an agent. See Scott Rowley, Rowley On Partnership § 9.0 (2d ed.1960). Within a partnership, each partner is the agent for the other partners and the partnership in the partnership business. Id. Thus, a partner has the authority to act both as an agent for the other partners and as an agent for the partnership. Additionally, a partner in a firm is not hindered from engaging in business transactions with the firm in good faith so long as the firm receives a fair consideration for its bargain. See id. § 21.1.