## Facts

- Janet Carrier’s hot water heater failed about four years after it had been installed by a different plumber.
- In September 1994, Bruce M. McLlarky, doing business as Assured Plumbing & Heating, installed a replacement water heater in Carrier’s home.
- McLlarky told Carrier he believed the failed heater might be under the manufacturer’s warranty and that he would try to obtain a manufacturer credit against the cost of the replacement.
- McLlarky provided an invoice indicating that a warranty credit might be available.
- McLlarky took the defective heater to a supplier, which then returned it to the manufacturer in the ordinary course of warranty processing.
- Carrier contacted McLlarky multiple times about the status of any credit; McLlarky responded that he would pass along any refund when he received it.
- McLlarky never promised or guaranteed that Carrier would receive a credit; he promised only to try to obtain one and to remit it if received.
- Letters from a supplier stated that McLlarky handled the return in the normal manner and that it would be expected that he would not issue a credit to Carrier until he actually received one from the manufacturer.
- A supplier also indicated that Carrier’s heater was out of warranty, and the manufacturer did not issue any credit.
- Carrier sued McLlarky in small claims court and obtained a judgment against him.
- McLlarky appealed to the New Hampshire Supreme Court.

## Issues

1. Whether the evidence supported the trial court’s finding that Carrier and McLlarky formed an agency relationship for the limited purpose of returning the heater to seek a manufacturer credit.
2. If an agency relationship existed, whether McLlarky breached an agent’s duty to Carrier by failing to obtain a credit or by failing to remit a credit to her.

## Decision

- The Supreme Court found no error in the trial court’s determination that an agency agreement existed under which McLlarky would, on Carrier’s behalf, return the heater for a possible credit.
- The Supreme Court reversed the judgment for Carrier because the record did not support a finding that McLlarky breached any duty within the scope of that limited agency.
- McLlarky agreed only to try to obtain a credit and to transmit any credit he received; he did not guarantee that a credit would be issued.
- Evidence showed McLlarky returned the heater through normal channels and acted as a dealer would be expected to act in processing a warranty claim.
- Because the heater was out of warranty, there was no credit due; therefore, McLlarky could not be liable for failing to obtain a credit that was unavailable.
- McLlarky also could not be liable for failing to remit money he never received from the manufacturer.

## Legal Principles

- An agency relationship is created when a principal authorizes another to act on the principal’s behalf and the other consents; authority and consent may be implied from the parties’ conduct.
- Whether an agency agreement has been created is a question of fact, and an appellate court will not overturn that finding unless it lacks evidentiary support or is legally erroneous.
- An agent may be liable to the principal for damages caused by the agent’s breach of duty, but the agent’s duty is measured by the scope of the undertaking the agent accepted.
- When an agent agrees to attempt to obtain a benefit (rather than promise a result), the agent’s obligation is to use reasonable care and reasonable efforts, not to produce the benefit.
- An agent is not liable for failure to obtain a benefit where the principal had no right to it (such as when a product is out of warranty and no credit is available).
- An agent has no duty to remit funds to the principal that the agent never received on the principal’s behalf.

## Conclusion

Carrier and McLlarky formed a limited agency relationship for the purpose of returning the failed water heater to seek a possible manufacturer credit, but McLlarky’s duty was only to make reasonable efforts within that undertaking and to pass along any credit actually received; because he processed the return through ordinary channels, the heater was out of warranty, and no credit was issued or received, the Supreme Court reversed the small claims judgment against him.


Carrier v. McLlarky, 693 A.2d 76 (1997)