Hunter Mining Labs., Inc. v. Management Assistance case brief summary

Hunter Mining Labs., Inc. v. Management Assistance (Nevada 1988) 

[Control/Franchises]
 

o   Facts

§  MAI (a manufacturer of computers) had dealership agreements with Hubco and Data Doctors (which sold its products)

§  The agreement required the dealers to, inter alia, maintain appropriate premises, inform Mai of changes in management, and to submit monthly reports.

§  MAI reserved the right to refused to sell to either if they didn’t meet certain credit standards.

o   Holding

§  Data Doctors and Hubco were NOT agents of MAI

·         MAI did NOT CONTROL the DAY TO DAY OPERATIONS of either DD or Hubco.

o   Reasoning

§  In an agency relationship, the principal possess the right to control the agent’s conduct. Restatement (Second) of Agency § 14. This principle of agency, however, does not mean that an agency relationship exists every time one party has a contractual right to control some aspect of another party’s business.

§  Only when a manufacturer controls the day to day or operative details of the dealer’s business is an agency potentially created

§  Another essential element of agency missing in this case is a fiduciary obligation on the part of the alleged agents to “act primarily for the benefit of MAI in matters connected with their undertaking.”