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Kozasa v. Guardian Elec. Mfg. Co. - 99 Ill. App. 3d 669, 54 Ill. Dec. 920, 425 N.E.2d 1137 (1981)

Rule:

The test of agency is the existence of the right to control the method or manner of accomplishing a task by the alleged agent, as well as the agent's ability to subject the principal to personal liability. The distinguishing characteristic of an agent is that he represents another contractually. When properly authorized, he makes contracts or other negotiations of a business nature on behalf of his principal, by which his principal is bound. On the other hand, the "middleman" or "go-between" has nothing to do with negotiations, and thus it is of no importance that both parties pay him.

Facts:

M. Matthew Kozasa designed a relay, licensed it to Koike Electrica Industrial Company, Ltd. (“Koike”), and then acted as a finder of Koike for Guardian Electric Manufacturing Company (“Guardian Electric”). When Guardian Electric learned of Kozasa's arrangement with Koike, it first threatened to cease and then ceased making payments to Kozasa pursuant to the parties' oral agreement. The lower court found for Kozasa.

Issue:

Was Kozasa considered an agent of Guardian Electric which makes the former liable for breach of duty for not disclosing his license fee with Koike?

Answer:

No

Conclusion:

The court held that Kozasa's cause accrued when Guardian Electric failed to make a payment under the agreement, and not upon Guardian Electric's alleged anticipatory repudiation. In any event the court held that an anticipatory repudiation could not force a plaintiff's hand in respect of the statute of limitations. The court next held that because Kozasa was not Guardian Electric's agent, but was instead a middleman, Kozasa breached no duty to Guardian Electric by failing to disclose his license fee with Koike, and thus had committed no fraud which would have excused Guardian Electric's performance. The court found that the damages were estimated by competent evidence and methods.

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