ABC, LLC is a single member LLC that is owned and run by Gerald White. White uses independent contractors for all aspects of his business,
ABC, LLC is a single member LLC that is owned and run by Gerald White. White uses independent contractors for all aspects of his business, from sales to marketing. He is, himself, the only employee of the business. ABC engages primarily in offering credit monitoring to customers. ABC often hires affiliates to attract customers and drive traffic to his website. In exchange, the affiliates are paid a commission on the sales they generate for the business. Over the course of six years, ABC generated more than $10 million in revenue, during which time White hired Affiliate Co. run by a man named Craig Pierce. Pierce in turn engaged Lloyd who established and ran a fraudulent advertising campaign to generate business for ABC. Lloyd posted ads on a social media network impersonating the manager of a rental property and inviting customers to take a tour, before which he required them to submit to a credit report. When a victim would click on the link provided by Lloyd, she would be taken to a site offering a free report but was unknowingly enrolled in a credit monitoring service for which she would be charged a monthly fee. ABC, White, Pierce, and Lloyd all made significant profit off the venture and several text messages between the parties indicate that White was aware of the tactics used by Lloyd. Is ABC liable for the actions of Lloyd even if he did not approve of them?
a. No, ABC did not give actual authority to Lloyd to engage in this marketing scheme.
b. No, Pierce and Lloyd were independent contractors; therefore ABC is not liable for their actions.
c. Yes, ABC ratified the actions of Lloyd.
d. No, Lloyd was only the agent of Pierce and not of ABC.
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