Delegated management and agents United States corporate law

although corporation may considered separate legal person, physically cannot act itself. there are, therefore, rules corporation statutes , law of agency attribute acts of real people corporation, make contracts, deal property, commission torts, , on. first, board of directors typically appointed @ first corporate meeting whoever articles of incorporation identify entitled elect them. board given collective power direct, manage , represent corporation. power (and limits) delegated directors state s law, or articles of incorporation. second, corporation laws set out roles particular officers of corporation, in senior management, on or outside of board. labor law views directors , officers holding contracts of employment, although not purposes. if state law, or corporation s bylaws silent, terms of these contracts define in further detail role of directors , officers. third, directors , officers of corporation have authority delegate tasks, , hire employees jobs need performing. again, terms of employment contracts shape express terms on employees act on behalf of corporation.

the actions of employees, in course of employment become of corporation, when goes right or wrong because thought if corporation takes benefits of employee s work, should take burdens.

toward outside world, acts of directors, officers , other employees binding on corporation depending on law of agency , principles of vicarious liability (or respondeat superior). used common law recognized constraints on total capacity of corporation. if director or employee acted beyond purposes or powers of corporation (ultra vires), contract ex ante void , unenforceable. rule abandoned in earlier 20th century, , today corporations have unlimited capacity , purposes. however, not actions corporate agents binding. instance, in south sacramento drayage co v campbell soup co held traffic manager worked campbell soup company did not (unsurprisingly) have authority enter 15-year exclusive dealing contract intrastate hauling of tomatoes. standard principles of commercial agency apply ( apparent authority ). if reasonable person not think employee (given or position , role) has authority enter contract, corporation cannot bound. however, corporations can expressly confer greater authority on officers , employees, , bound if contracts give express or implied actual authority. treatment of liability contracts , other consent based obligations, however, differs torts , other wrongs. here objective of law ensure internalization of externalities or enterprise risks seen cast wider scope of liability.