Answer:
Definitions
Agent - is someone who is hired by a principle to act for the principle. The agent is seen to be controlled by the principle and any liability caused by the agent will make the principle liable.
Independent Contractor - is someone who is hired to produce a certain product or service. However, they are not controlled by the hirer and are independent in making choices required to complete the job according to the hiring agreement.
Discussion
The most important difference between an agent and independent contractor is the liability on the principle/hirer. An agent's action will cause liability for the principle and will also bind the principle on contracts as they are seen to represent the principle. Contrarily, independent contractors are not controlled by the hirer and make not represent the hirer in contracts; they only do what is necessary to fulfill their duty.
Answer:
Refer to the case Duluth Herald and News Tribune v Plymouth Optical
Case Issue
The facts to this case are:
• An optician used exclusive products by company P (defendant) and also changed his business name to the company's.
• P was aware of this fact, but did nothing about it.
• Optician later advertised his services at a local newspaper (plaintiff).
• Plaintiff did not receive payments from optician for advertisement and sued P for payment.
The issue is whether the plaintiff can recover cost from P , when the optician who contracted with them was not an actual agent of P.
Relevant Terms, Laws, and Cases
Agent - is someone who is hired by a principle to act for the principle. The agent is seen to be controlled by the principle and any liability caused by the agent will make the principle liable.
Apparent Authority - an agent has apparent authority when:
• Agent doesn't have authority to act in a certain manner.
• However, principle does not disclose that agent doesn't have authority to third persons.
• The third person is given an impression that agent has authority to act in that manner.
• Apparent authority holds the principle liable.
Opinion
The court held for plaintiff.
They argued that:
• The optician had apparent authority which made it seem like they acted for P.
• Apparent authority made P liable, even though the optician wasn't authorized to act in such manner.
• P did nothing to stop this apparent authority; they knew the optician was using their company name for 3 years.
• P could've avoided liability by advertising or informing others that actions of franchisees such as the optician are independent from P.
Therefore, P is liable to plaintiff as principle, under the theory of apparent authority.
Answer:
The principle gave an exclusive two y ear contract for the agent to represent him for all business matters.
The principle does have a right to end the agency relationship at any time, but the contract was exclusive for two years.
Ending the agency relationship within that period would be a breach of contract. In this case, the principle ended the agency relationship before the two years was over.
Hence, the principle is incorrect in claiming he is not liable to the agent.