Also known as: general agents
Written by attorneys — see sources below.
An agent authorized to conduct a series of transactions involving a continuity of service. This classification turns on the ongoing character of the agent's role rather than the number of acts performed.
Gwen Gallagher hired Gareth Glover as farm manager to handle all buying and selling for her grain operation. Over three years Glover negotiated repeated seed purchases, equipment leases, and crop sales. Because Glover's role involved a continuing series of similar transactions, he qualified as a general agent whose contracts bound Gallagher.
Galaxy Technologies extended credit to Griffin Industries and began directing its grain purchases and sales through daily instructions. Once Galaxy assumed management of Griffin Industries' operations, the debtor's manager became Galaxy's general agent for routine business dealings.
In 1964 Lloyd Hill, who operated Warren Grain & Seed Co. in Warren, Minnesota, with his son Gary Hill, applied for financing from Cargill, Inc. Cargill officials from the Moorhead regional office investigated Warren's operations and recommended financing. Warren and Cargill then entered a security agreement providing open-account financing up to an initial limit of $175,000 that was later raised to $300,000 in 1967, $750,000 in 1972, and $1,250,000 in 1976. The agreements gave Cargill a right of first refusal to purchase market grain, required Warren to furnish annual financial statements, granted Cargill access to Warren's books, and required Cargill's consent before Warren could make capital improvements or repairs exceeding $5,000, become a guarantor on another's debt, encumber assets, declare dividends, or sell and purchase stock. Cargill officials visited Warren shortly after the agreement, examined financial records, and periodically reminded Warren to implement recommended improvements. A 1970 memo to the Cargill official in charge of the Warren account stated that the organization needed very strong paternal guidance. In 1970 and 1971 Warren acted as Cargill's agent in contracts for Bounty 208 wheat seed and sunflower seed, with Cargill named as the contracting party and paying farmers directly. Warren shipped 90 percent of its cash grain to Cargill. As Warren's indebtedness exceeded its credit line, Cargill contacted Warren daily, maintained a daily debit position, and in 1976 opened a bank account in Warren's name funded by drafts drawn on Cargill. In early 1977 an audit revealed Warren was $4 million in debt with deliberately falsified financial statements. Cargill refused further financing and sent an official to supervise the elevator, including disbursement of funds. Warren ceased operations owing Cargill $3.6 million and owing the 86 plaintiff farmers approximately $2 million. The farmers sued Cargill and Warren in Marshall County District Court in 1977. The case was bifurcated, with damages determined by the court in the first phase and liability tried to a jury in the second phase. The jury found that Cargill's conduct from 1973 to 1977 had made it Warren's principal with respect to the purchase and sale of grain and seed grain and the storage of grain. The court ruled that Cargill was a disclosed principal and entered judgment for the plaintiffs. Cargill appealed.
View caseA general agent is authorized to conduct a series of transactions involving continuity of service. A special agent handles only a single transaction or a series lacking that continuity.
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No. The test focuses on whether the principal authorized a continuing series of transactions rather than isolated acts. A lengthy course of recurring dealings supports the classification when it reflects an ongoing role.
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Yes. Subsequent conduct and representations by the principal can establish continuity of service even if the original writing suggested a limited assignment. Courts examine the actual pattern of dealings over time.
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A general agent can bind the principal to acts that usually accompany or are incidental to the authorized transactions. This broader authority arises because the role contemplates ongoing service rather than episodic tasks.
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