The principle of the principal: An examination of hotel-management agreements and the laws of agency

Cornell Hotel and Restaurant Administration Quarterly

Volumn 38, Issue 4, 1997, Pages 22-27

  Shindler, Michael C ^a  

^a NONE

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EID: 0031206403     PISSN: 00108804     EISSN: None     Source Type: Journal    
DOI: 10.1177/001088049703800430     Document Type: Article

References (23)

1. 1 Robert E. Woolley et al. v. Embassy Suites, Inc., et al., 227 Cal. App. 3d 1520, 278 Cal. Rptr. 719 (Cal. App. 1 Dist. 1991).
2. 2 Pacific Landmark Hotel Ltd. et al. v. Marriott Hotels, Inc., et al., 19 Cal. App. 4th 615, 23 Cal. Rptr. 555 (Cal. App. 4 Dist. 1993).
3. 3 Government Guarantee Fund of the Republic of Finland et al. v. Hyatt Corporation, 95 F. 3d 291 (3rd Cir. 1996).
4. 4 Ibid.
5. 5 As discussed more fully in: James J. Eyster, "Hotel Management Contracts in the U.S.: The Revolution Continues," Cornell Hotel and Restaurant Administration Quarterly, 38, No. 3 (June 1997), pp. 14-20; and James J. Eyster, "Hotel Management Contracts in the U.S.: Twelve Areas of Concern," Cornell Hotel and Restaurant Administration Quarterly, 38, No. 3 (June 1997), pp. 21-33.
6. 5 As discussed more fully in: James J. Eyster, "Hotel Management Contracts in the U.S.: The Revolution Continues," Cornell Hotel and Restaurant Administration Quarterly, 38, No. 3 (June 1997), pp. 14-20; and James J. Eyster, "Hotel Management Contracts in the U.S.: Twelve Areas of Concern," Cornell Hotel and Restaurant Administration Quarterly, 38, No. 3 (June 1997), pp. 21-33.
7. 6 Black's Law Dictionary (6th ed., 1990, p. 63) defines an agent as follows: "[a] person authorized by another (principal) to act for or in place of him; one intrusted with another's business."
8. 7 American Law Institute, Restatement of the Law of Agency, 2nd ed. (St. Paul, MN: American Law Institute Publishers, 1958), ¶383-389.
9. 8 American Law Institute, ¶119 cmt. a.
10. 9The facts and holding of the case are taken from 278 Cal. Rptr., as cited above.
11. 10 W. Edward Sell, Agency (Mineola, N.Y.: Foundation Press, 1975), ¶229.
12. 11 As cited above in 19 Cal. App. 4th 615, 23 Cal. Rptr. 555-563.
13. 12 Op. cit., at 561.
14. 13 As cited above, 95 F.3d 291 (3rd Cir. 1996), affirming 166 F.R.D. 321 (D. Virgin Islands 1996). Facts and holdings of the case are taken from both sources.
15. 14 95 F. 3d at 301.
16. 15 Warren A. Seavey, Handbook of the Law of Agency (St. Paul, MN: West Publishing Co., 1964), ¶46.
17. 16 American Law Institute, ¶118.
18. 17 Reuschlein and Gregory, ¶43, 44.
19. 18 Although Pacific Landmark did not state categorically that Marriott would have had a coupled agency had it used its management entity as its ownership entity, it is clear that its failure to do so was fatal to its case. See: Pacific Landmark Hotel Ltd. et al. v. Marriott Hotels, Inc., et al., supra. In its agreement with Pacific Landmark, Marriott stated that the agency was "coupled with interest" and thus not revocable. Marriott's foresight in 1987 is notable although its execution of agency with interest was not perfect.
20. 19 23 Cal. Rptr. at 561.
21. 20 "[E]ven if the parties intended to create an irrevocable agency, one coupled with an interest, unless they do so and such an interest does in fact exist, the . . . power to revoke may be exercised." Ibid.
22. 21 23 Cal. Rptr. at 563.
23. 22 The appellate court's findings in Hyatt that Hyatt Corporation breached the management agreement do not contradict this point. Had the court not determined that a breach by Hyatt had occurred, the GGF parties may well have been found to have breached the agreement and thereby exposed themselves to a large damage claim.