A Revised Prospectus for a Third Restatement of Agency

Abstract

The article is based on a prospectus submitted to the American Law Institute proposing a new Restatement of Agency, to succeed Restatement (Second) of Agency, which was completed in 1958. Like the prospectus, the article identifies a number of practical and theoretical respects in which Restatement (Second) has been overtaken by subsequent developments. The article begins by distinguishing the definition of agency within legal doctrine from the meanings ascribed to agency in other disciplines, such as economics. The article then sketches the key elements of doctrine within the common law of agency and illustrates contemporary controversies concerning their application. Agency is intellectually distinctive within the law because it focuses on relationships in which one person (the agent), one way or another, is in a position to act with consequences for another person (the principal). Agency doctrine looks inward, to the relationship between the agent and the principal, as well as outward, to the consequences for the agent and principal of the agent's interactions with third parties. The outward looking consequences of agency encompass contracts entered into by the agent as well as the agent's wrongful acts. Much in agency turns on the scope or range of the agent's relationship with the principal. Agency doctrine reaches broadly, defining the legal consequences of choosing to act through another person in lieu of oneself. In a contemporary context, many principals as well as many agents are organizations, themselves networks or chains of agency relationships. A contemporary Restatement should reflect this reality, as well as provide an intellectual framework and a set of doctrinal formulations that enable courts, legal practitioners, and scholars to analyze ongoing and future developments.