Quiz 24: Agency Relationships in Business

Business

Difference between an employee and an independent contractor: The distinction is that an employee is a person who works on the behalf of his owner (principal). It can be said that the employee is an agent for his employer; laws of the agency and overlapping of the employment laws are significant as he (employee) deals with the third party. When an employee sells a good then it is to be obligatory on the employer (principal). Whereas on the other hand an independent contractor is a person who will work and receive payment for the work done by an employer but the employer is not in control of the conditions for the work that is done by the contractor. An independent contractor can be said to be an agent not an employee.

Mr S did not directly order the material but the promotional material was ordered by an agent acting on behalf of Springer. Springer created ratification for the contract in question by demonstrating confirmation through his actions. Springer did not return the material instead of used him and so showed his consent for the same. Ratification in concerned with the objective of the individual which can be demonstrated by words and also by actions of the individual. Taking this into consideration Mr D is correct.

Person LM dropped by BM store in a hurry to purchase a new pair of nylons. In the store, she hit Cashier VW who was slowing her pace. Although it was not clear whether she did it intentionally or not. But, in turn Cashier VW grabbed her from hair and hit repeatedly in back of her head. The store immediately fired the cashier after the incident for violating their policy of no-fighting. Subsequently, Person LM sued the store for assault and battery. 1.In the given case, Company BM might be held liable under the doctrine of 'respondeat superior'. As per this doctrine, a principle might also be held liable for any harm caused by his or her agent to a third party. The doctrine of respondeat superior imposes as indirect liability also known as vicarious liability on the employer for the torts committed by the agent acting within the scope of employment. 2.The key factor that would help in determining whether Company BM is liable under the doctrine of respondeat superior is ' whether the act committed by cashier VW was within the scope of the agency or employment'. There are several factors that are considered to determine the scope of employment of the employee. These factors are listed below: • The place, timing as well as the purpose of the act committed by the employee • Whether the employer has authorized the employee's act • Whether the act was commonly performed by the employee • Level of the employee's private interest in the act • Level of employer's interest in the act • Whether the means by which the injury took place was facilitated by the employer • Whether the employee has committed such act before, and the employer has sufficient reason to know that the employee would perform the act again • Whether the act committed by the employee constituted serios crime. On the basis of above-mentioned factors, court can determine whether Company BM would be held liable under the doctrine of respondeat superior. 3.Potential liability of a principle in case of doctrine of respondeat superior is affected whether the agent's behaviour was tort of negligence or intentional tort. Generally, in case of intentional torts, the employer cannot be held liable for the employee. However, in cases of intentional torts that are performed within the scope of employment, the employer can be held liable for the act of the employee. Hence, it is concluded that Company BM might not be held under doctrine of liability if it is found that the tort committed by the employee was intentional and not within the scope of employment. 4.As mentioned above, there are several factors considered by the court to determine whether an employer would be held under doctrine of respondeat superior. One of the most crucial factors required for the doctrine is whether the employee has committed such act before, and the employer has sufficient reason to know that the employee would perform the act again. In case, Company BM hired Cashier VW after being well-aware of the felony assault and battery committed by her in past, it would be held liable under the doctrine of superior liability. This would be applicable even if the cashier was not working within the scope of employment during the committed act. Hence, the fact that Company BM hired the cashier even after being aware of her battery and assault charges, it would be held under doctrine of respondeat superior.

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