Guilty Knowledge

Agency law's attribution rules impose most of the risk of agent misconduct on the party who selects the agent and benefits from the agent's endeavors, i.e., the principal. The rules thus help establish and maintain a proper balance of risk between principals and third parties. Unfortunately, a recent unpublished decision of the Minnesota Court of Appeals, Engen v. Mitch's Bar & Grill, threatens to upset that balance and release principals from responsibility for an important type of information possessed by their agents. Engen is dangerous, despite its unpublished status. This articles seeks to eliminate any influence the case might have by demonstrating that the decision: (i) misuses the precedent it cites; (ii) ignores precedent more closely on point; (iii) is oblivious to the rationales underlying agency law's rules for attributing information, to the Restatement (Second) of Agency and to sensible precedent from other jurisdictions; and (iv) articulates a rule that will produce absurd results