what do you think about this discussion?
Sylvestor Stallion("Sly" to his friends like you and me), owns a luxurious home in Horrorwood, NY. Sly hires ABC Renovations(ABC) to construct a patio addition to his home. Sly also has a housekeeper named Gwen Stuffani(Gwen) who cleans his house, does his dishes, walks his dogs, and cooks his lunch every Monday, Wednesday, and Friday for four hours each time. Sly pays Gwen $500 per week by check payable to her. He does not deduct any payroll taxes. During the course of construction Pete, a worker for ABC indicates he needs a ride to get to Home Depot to buy more nails, since another co-worker took their company truck elsewhere for another job.Gwen offers to drive him there and back in her car. While driving there, Gwen runs a red light and gets into a serious crash that injures both she and Pete. What liability does Sly have for the injuries to Gwen and Pete? Please make reference to the terms: employee, independent contractor, respondeat superior, and vicarious liability.
It is A mini lecture.
Agency relationships take on many different aspects in a business setting. That cashier, at the front of the store, even though they are also an employee, is an agent of their principal, the store owner. That means the agent can bind the principal to a sale to a customer. Agents can also be independent contractors, see page 575. An independent contractor is not an employee, and as such, we will see that there is a very important different set of legal concepts that apply. A real estate agent, is an agent for the principal, the seller or the buyer, and also an independent contractor. A plumber hired to x the leak in the house is an independent contractor. Generally, an agent is a party, (can be a person or a company), that acts on behalf of the principal in dealing with third parties. They could act as buyer, or act as a seller, orjust act to carry out an obligation pursuant to an existing contract. 50 if you hired my company to perform a service, and | send outJoe Schmoe, he may be an employee, he may be a contractor, but he is most likely my agent. Let's say you work for a company taking purchase orders from potential customers, and you get a call from Sally Roe my purchasing agent. Do | the owner of the company need to sign the contract, or is her signature on the invoice sufficient. Likely she is my agent and has authority to bind my company. How are agency relationships created. Generally four(4) different methods. 1. Agency by Agreement-this occurs when the principal and agent agree to form a relationship to allow the the agent to act for the principal. It can be oral or written. It can also be implied by conduct. 2. Agency by Ratication- here, the principal by his or her actions or by agreemnet raties the activity and conduct of the person(principal) when in reality they did not have the authority when the deal was made with the third party. 3. Estoppel - In this case the principal puts a person in a position where a reasonable person would believe they have authority to act in behalf of the principal. Ex.-| give you a business card that says vice president of sales, and send you out. Even if I told you that you must clear all deals with me, if you make a deal with a third party, most likely the company is liable. If a third party reasonably relies to their detriment we have an agency by estoppel situation. 4. Agency By Operation of Law-Here the agent is unable to contact the pricnipal and an emergency situation arises, the agent acts outside of their authority with the principal's best interest in mind, the court will form an agency relationship and afrm the deal to do equity. Once formed, the agent has the following duites: 1. Performance, 2. Notication, 3. Loyalty, 4. Obedience, 5. Accounting. They kiind of speak for themselves, but a succinct denition is provided by your author on page 581. Once formed the principal also has duties. they are: 1. Compensation, 2. Reimbursement and indemnication, 3. Cooperation, and 4. Safe Working Conditions. these are also nicely dened on page 620. Next we look at the liability for contracts that are formed. First we look at it from the liability of the principal, and then for the liability fo the agent. Here we need to first determine whether the principal was disclosed, partially disclosed, or undisclosed. See Page 610. Disclosed, the third party knows that the agent is an agent and is making the deal for the principal. Here the principal is liable, and if the agent is acting within the scope of their authority the agent is not liable on the contract. If the principal is partially disclosed, meaning the third party know the agent is dealing for someone else, but is not been authorized to disclose the name of the principal, the principal is genrally liable if the agent was acting within the scope of their duties. Here generally, the agent is also liable on the contract in the event of default. That can change, if after the deal is struck, a written contract is made and only the principal signs it along with the third party. The last instance is where the principal is undisclosed. That means that the third party does not know that anyone else is even involved, Here the agent is liable for sure, and if the agent was acting within the authority given them, the pricnipal is as well. Now, let's take a look at the legal liability issues. First, is the person an employee or an independent contractor.Determining employee status for an agent changes the dynamic signicantly. Why, an employee gets worker's compensation, health benefits possibly, Affordable Care Act applies, witholding and payroll issues apply. Employers must match the 7.65% deducted from the employee's pay for social security. None of the above applies to independentcontractors. Think about it. when you hire the plumber do you withhold payroll taxes? No. But where we see a lot of contention is in the area of private nursing, adult day care, child care, home health aids, and household help, like nanny's and cleaners. Many of these are close calls. Take a look at the criteria on page 576 used by the courts, and those used by the IRS on page 578. A lot of this legal determination boils down to the amount of control exerted on the person, degree of expertise required for thejob, and whether the relationship is exclusive to the one party. On the issue of liability for tortious conduct of an employee, here we would want to know whether the party is acting within the scope of their employment. Generally for example, an employee on their way to work, commuting, no liability for the employer(principal) exists. If the employee though is driving to a sales call, yes, under the doctrine of respondeat superior. See page 590. The important point is that the employee must be acting within the scope of their employment at the time the tort occurs. Think ofa car accident here. lfyou are on your lunch break, and hit a pedestrian, the employer is not likely liable. However, under the concept ofvicarious liability, page 590 if that employee or independent contractor is driving a car owned by the company, the company is liable. If the party is an independent contractor, who is picking up a plumbing part, driving his own vehicle, the principal is not generally liable. If he drives your car, vicarious liability is in play and you are liable. Ever wonder why some employers give their employees a car allowance, rather own the car? Liaiblity is a key factor, because ifyou go out on Saturday night in the company car, the company is liable if you negligently injure someone with it. Yes your employer can sue you, but the company's insurance is on the hook as is the company itself
